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What Are the Trends for Halloween Retail Spending?

2013 Sales Will Be Down -- Not Good for Black Friday



Halloween is a great holiday for value-conscious families.

(Photo: Bill Green/Getty Images)

The uncertain state of the economy is spooking shoppers away from Halloween in 2013. Only 158 million people will celebrate it, down from a record 170 million people last year. They plan to spend less, too -- $75.03 a person, down from last year's all-time record of $79.82 each.The poll was taken in early September, so it's likely results will be even worse thanks to the government shutdown.

This is a serious concern, because Halloween's popularity had been rising. Halloween is a very affordable holiday, and the fact that people are backing away means they are really cutting back. Lower Halloween sales scares retailers, because it signals how well they'll do during  the all-important holiday season. That's when about 20% of retail sales occur for the entire year. The kick-off is Black Friday, which is just a month later. In fact, 40% of shoppers begin their holiday shopping before Halloween.

ThNational Retail Federation estimates Halloween will contribute $6.9 billion to retail sales, down from the record $8 billion spent last year, and the $7 billion spent in 2011. Halloween had been one bright note, with sales rising 54% since 2005. 

How It Affects You

Retailing only produces 6.1% of U.S. Gross Domestic Product (GDP). However, when it's down, so is wholesaling (also 6%) and manufacturing (about 12%). Retail sales are a strong indicator of consumer demand, and that's what drives the U.S. economy.

The financial press and the government are focusing on the wrong things -- whether the Fed continues Quantitative Easing, or the U.S. debt is eliminated, or Obamacare is defunded, delayed or delivered on time. You can't have healthy economic growth (2-3%) without enough demand. And it looks like demand is withering. That's scary.

Why Is Halloween So Popular?

Halloween's rise is due to changes that occurred during the 2008 financial crisisShoppers are attracted to Halloween because it doesn't cost as much  as Christmas or Thanksgiving to participate, and is still lots of fun! This is an example of the Shift to Thrift, where people are willing to spend money IF it provides a lot of value -- which Halloween does. 

Shoppers look to get a big bang for the buck, and Halloween delivers. What's the cost of a few bags of Halloween candy? Nearly three-quarters (72%) of Americans will hand out candy, spending just over $20 each. Spending on Halloween decor was just $19.79 per person, while nearly half will carve a pumpkin.  

This affordability meant that people spent more last year than even before the recession. The $80 a person was much higher than the $65 a person spent in 2007.Sales hit a low point in 2009 ($56), climbing quickly to $66 a person in 2010, and $72.31 in 2011.  

Here's another surprise -- shoppers spent more in October 2008 ($67) than the year before. You might think it's odd that shoppers would spend so much during what we now know was a recession year, but they didn't really realize they were in a recession on October 31, 2008. The economy had just started contracting (down 3.6% in the third quarter). More important to most Americans, unemployment was 6.5% -- the highest in 14 years, but relatively low by today's standards. In addition, consumers had more access to credit, as credit card debt hadn't plummeted to current levels.

What Are Shoppers Buying?

The most expensive part of Halloween is costumes. Fewer than half will buy costumes, spending $27.85 per person. This is also down from last year ($28.65 per person), but up from 2011 ($26.52). Nearly twice as many people (5 million) will dress as a witch, compared to 2.9 million as Batman. Next is popularity are vampires, pirates and zombies close behind..Children prefer to be a princess, animal or Batman. Another 14% of people will dress up their pets, the most popular costumes being pumpkin, hot dog or cat. (Source: NRF data, Halloween Costume Survey)

Nearly three-fourths will put up decorations, spending $20.99 each, while 36$ will buy greeting cards, spending $3.82 each.

The survey of shoppers was conducted by the BIGresearch for the National Retail Federation. The poll was taken of 9,393 consumers between September 5-10, 2013. The purpose was to gauge consumer behavior and shopping trends related to Halloween spending to help retail members of the Federation in their planning. The consumer polls have a margin of error of plus or minus 1.0 percent. (Source: NRF Halloween 2013) Article updated October 21, 2013

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