The Halloween Economy

Tallahassee, FL 10/31/2011 (StreetBeat) --Americans spend more and more on Halloween each year. All the costumes, decorations, candy, and cards add up to big business and have given rise to a crop of Halloween pop-up stores that are able to cash in during the two months a year they are open.

Consumers are ready to spend around $6.86 billion dollars this Halloween, according to an annual survey commissioned by the National Retail Federation. That comes out to an average of about $72 per American. Market Research firm IBISWorld forecasts this year’s spending at a more modest $5.9 billion. Still, the firm says that would be an 11.7% improvement from the year before, and a huge bounce-back from 2009, when the recession caused sales to drop a ghastly 22% to $4.31 billion.

WHO CELEBRATES
Of course, not all of that spending is spread out evenly. Just a little more than two-thirds of those surveyed by the National Retail Federation (NRF) said they planned to celebrate the holiday. That fraction stays about the same for both men and women, and across geographic regions. The big differentiator? Age. A full 89.1% of 18-24 year olds plan to party and spend. That percentage drops with each rising demographic bracket. Only 42% of those over 65 said they had plans for the holiday.

WHAT WE BUY: COSTUMES
Costumes make up the biggest chunk of Halloween sales, according to IBISWorld, comprising about 36% of the total. This year, the firm pegs overall costume purchases at $2.11 billion. According to their analysis: “Lady Gaga, vampires and traditional ghoul costumes will still top shoppers’ lists this year, while more classic looks, like 1960s Mad Men-inspired outfits, emerge as a new favorite.

WHAT WE BUY: PET COSTUMES
Fact: Americans plan to spend $300 million on pet costumes this year, according to the NRF. Make of that what you will, but at least it's still less than children’s costumes, which should account for about $1 billion in spending, or adult costumes, which should account for $1.2 billion. Somewhere out there, a black cat owner feels thrifty.

WHAT WE BUY: CANDY
Halloween season is candy season. Sweets makers see 8% of their sales during the holiday, according to the National Confectioners Association (NCA). That makes it the “largest confectionary holiday.” The industry group expects revenue to hit $2.27 billion, up about 1% from a year ago. IBISWorld pegs its 2011 estimate lower, at $1.81 billion, although by their calculations that would still represent an increase.

When it comes to candy picking, customers just opt for single serving sizes, good for handing out to trick-or-treaters. It’s also peak candy corn season: Manufacturers produce 35 million pounds of the waxy, tri-color kernels for the holiday.

WHAT WE BUY: DECORATIONS AND CARDS
Greeting card sales have been slumping across the board, says IBISWorld Senior Analyst Nikola Panteva. But she believes they should still make up $320 million in sales on Halloween, up from last year’s $300 million. Decorations should be a full $1.67 billion, up from $1.49 billion last year.

HALLOWEEN VS. OTHER HOLIDAYS
Despite all the splurging, Halloween is still just a small slice of the holiday spending pie. In 2010, it made up just 2.6% of the $228 billion Americans spent during the holidays, putting it behind Christmas (59.2%), Thanksgiving (13.4%), Valentine's Day (7.7%), Mother’s Day (6.5%), Easter (6.1%), and Father’s Day (4.5%). Of course, as stated in slide #8, alcohol sales were not factored into the equation.

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