October 30, 2023
Halloween isn’t just a holiday where children go door-to-door looking for tricks or treats. It is a major holiday for retailers and candy makers as well. And this year is shaping up to be bigger than ever.
The National Retail Federation said Halloween spending in 2023 was expected to reach a record $12.2 billion, up from last year’s previous record of $10.6 billion. For retail shareholders, there are ways to tap into this growing Halloween market.
A record number of people (73%) will participate in Halloween-related activities this year, up from 69% in 2022, according to the retail trade group. Per-person spending is also up as consumers plan to spend a record $108.24 each, up from the previous record of $102.74 in 2021.
“More Americans than ever will be reaching into their wallets and spending a record amount of money to celebrate Halloween this year,” NRF President and CEO Matthew Shay said. “Consumers will be shopping early for festive décor and other related items and retailers are prepared with the inventory to help customers and their families take part in this popular and fun tradition.”
The greatest increase in spending came from costumes. Sixty-nine percent of those celebrating Halloween plan to buy costumes, up from 67% last year and the highest in the NRF survey’s history. Total spending on costumes is expected to reach a record $4.1 billion, up from $3.6 billion in 2022.
Total spending on decorations, which grew in popularity during the pandemic and continues to resonate with consumers, is expected to reach $3.9 billion. Of those celebrating Halloween, more than three-quarters (77%) plan to purchase decorations, which is on par with last year, but up from 72% in 2019.
Candy spending is expected to reach $3.6 billion, up from $3.1 billion last year. Spending on Halloween greeting cards is projected to be $500 million, down slightly from $600 million in 2022 but above pre-pandemic levels.
Like previous years, the top ways consumers are planning to celebrate are handing out candy (68%), decorating their home or yard (53%), or dressing in costume (50%). However, in a return to pre-pandemic norms, more consumers also plan to throw or attend a party (32%) or take their children trick-or-treating (28%).
Discount stores (40%) remain the leading destination to buy Halloween items, followed by specialty Halloween/costume stores (39%) and online (32%). While specialty Halloween and costume shops have always been a top destination for Halloween items, more consumers plan to shop at these stores this year than in the past.
Individual investors might consider discount retailers such as Dollar General (Tii:DG), Dollar Tree (Tii:DLTR), Big Lots (Tii:BIG) and Five Below (Tii:FIVE). Other retailers such as Target (Tii:TGT), Walmart (Tii:WMT), Amazon (Tii:AMZN) and Home Depot (Tii:HD) also benefit from a Halloween bump. And for candy makers such as Hershey (Tii:HSY), Mondelēz International (Tii:MDLZ) and Tootsie Roll Industries (Tii:TR), Halloween fuels sales for the year.
So what costumes are people going to wear for Halloween 2023? According to the NRF, Spiderman is the No. 1 costume for children, followed by ghosts, superheroes and witches. For adults who plan to dress up, vampires, Barbie and Batman rank high. Popular pet costumes include pumpkins, hot dogs, bats, bumblebees and spiders.
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