NRF: Inflation, higher participation could push Easter sales to record $24 billion
The National Retail Federation (NRF) and Prosper Insights estimate 81% of Americans will spend a record $24 billion on Easter, up 15.38% from a year ago. Per capita spending is $192.01, up from $179.70 a year ago when 79% planned to observe the holiday.
Inflation is helping to push the spend higher, but the trade group also said more families are eager to gather and travel to see family now that the COVID-19 pandemic is no longer a primary concern.
“Easter endures as an important holiday for many Americans, signifying new beginnings and a time of celebration with friends and family. As consumers plan to mark the occasion through a variety of traditions, retailers are dedicated to making this year a memorable holiday,” said NRF CEO Matthew Shay.
The survey found spending is growing for candy, gifts and food this year compared to last. Consumers expect to spend $3.3 billion on Easter candy, up from $3.04 billion a year ago. Candy prices have trended higher year over year.
“With high marks for favorability and permissibility, along with the majority of consumers agreeing that confectionery is an affordable treat, chocolate and candy sales grew despite economic pressures,” said John Downs, CEO of National Confectioners Association. “Consumers continue to treat with chocolate and candy to enhance their emotional well-being, celebrate holidays and enjoy everyday moments.”
Candy giant Hershey enacted 14% price increases in its confectionery products in mid-2022. The company cited higher dairy, sugar and other ingredient costs, along with increased labor and packaging expenses for the increases. Despite the price hikes, Hershey said demand has been resilient in 2023. The company expects record sales growth between 6% and 8% for the fiscal year.
With 56% of consumers planning to cook a holiday meal, food spending is expected to top $7.3 billion, up from $6.32 billion a year ago when 59% cooked a special meal for Easter. Inflationary food prices are the reason for the increased food spend this year.
The U.S. Bureau of Labor Statistics (BLS) reports food at home prices rose 10.2% last month compared to a year ago. The index for cereals and bakery products rose 14.6% over the 12 months, and dairy prices rose 12.3% from a year ago. A dozen eggs for coloring will cost 70% more than last year and meat prices are up 6.8%. A fruit salad will be as much as 12.4% more this year. BLS said the remaining major grocery store food groups posted increases ranging from 5.3% from a year ago.
Despite the higher food costs, gathering for a family dinner was the most popular way families said they plan to celebrate the holiday, according to the survey. Half of respondents said they will spend the holiday with family and friends and 34% will take part in an Easter egg hunt. About 43% said they plan to attend church services, compared to 22% last year. Consumers expect to spend $4 billion on new clothing, up from $3.61 billion spent a year ago. Apparel prices are 3.3% higher this year compared to last.
Gifting is another big spending category for Easter with 54% of respondents planning to dole out a cumulative $3.8 billion, up from $3.7% a year ago. Consumers also plan to spend $1.8 billion on flowers, $1.7 billion on decorations with $1.1 billion spent on greeting cards. Each of those three categories had higher spending compared to 2022.
“We are seeing real Easter sales growth compared with pre-pandemic, and among the drivers are consumers who are planning to purchase more Easter clothing and gifts. Consumers ages 35 to 44 will bump up their spending more than any other group,” said Phil Rist, Prosper vice president of strategy.
NRF said 54% of the respondents who said they will not celebrate the Easter holiday are still shopping for Easter bargains on food, fashion for themselves and home decor.