Halloween profitability lifting retailer spirits
By Randy Tucker
The Cincinnati Enquirer
Even though Halloween has been good for business for decades, the celebration of the pagan festival has evolved from a one-night holiday into a seasonal event that scares up increasing revenues for many retailers.
• Candy: Halloween is first in seasonal sales at about $2 billion. Easter is second with $1.8 billion. • Trick-or-treaters: The United States has 41.1 million children between the ages of 5 and 14, a larger group than those who are now the baby boomers who were 5 to 14 years old at the time of the 1970 census. • Home decor: Sales of $586 million second only to Christmas. • Costumes: About $1.5 billion in sales. • Miscellaneous: About $2.7 million in sales of greeting cards, pumpkins and party supplies last year. Sources: The National Retail Federation, Census Bureau and Enquirer research — The Cincinnati Enquirer
It's grown so big, there now are stores devoted to Halloween — much like the stores that specialize in Christmas.
The trappings of Halloween can add up:
Why has Halloween grown into the second most-profitable seasonal event, after the colossus Christmas?
"Halloween has become a huge party holiday," said Jon Stiles, general manager of the Party Source in Bellevue, Ky., which sells most things Halloween except costumes.
"Adults have absolutely usurped Halloween from children, and our business is even better this year than last year."
Halloween is now more central in the marketing of other businesses, such as family-owned Shaw Farms near Milford, Ohio.
The family uses the holiday to attract people to its 1,800-acre spread via TV ads for hayrides through pumpkin patches and other Halloween-related events.
"Halloween is definitely a wonderful marketing tool, and we use it to sell our fall harvest and Thanksgiving merchandise, too," said Pam Shaw, who has helped run the farm for more than two decades. "It's definitely a much bigger business now than it was 10 years ago — and every year, it seems to get a little bit bigger."
Some experts say Halloween sales can be an early indicator of consumer confidence entering the critical Christmas shopping season, when many retailers generate more than a quarter of their annual revenues.
This year, consumers are expected to pour $6.9 billion into costumes, candy, party decorations and libations, which would again make it the second most profitable holiday for retailers behind Christmas, according to a Halloween consumer survey from the National Retail Federation.
For some folks, however, Halloween spending will be masked by caution this year.
"We'll buy candy for the kids in the neighborhood and put out the same decorations we had last year, but we're not planning anything elaborate," said Mindy Sands of Sharonville, Ohio, who has two children. "Our kids are even wearing the same costumes they wore last year."
The survey revealed that, on average, consumers plan to spend roughly $44 per household this year on Halloween — a dollar less than last year's figure.
But the outlook for Halloween is still strong, said Tracy Mullin, National Retail Federation president and CEO.
"Adults' fascination with Halloween has helped transform the holiday into a much-needed sales boost for many retailers," Mullin said.
Not everyone agrees that Halloween sales can be viewed as a barometer of things to come.
Scott Krugman, a retail trend watcher based in Washington, D.C., said that just because consumers are willing to spend $40 to $50 to celebrate Halloween doesn't mean they'll be spending the hundreds of dollars needed to make Christmas a success for most retailers.
"Halloween will be about a $7 billion holiday this year, while Christmas sales were $201 billion last year," Krugman said. "The spending per household for both holidays is so far apart that a strong or weak Halloween really has no bearing on the holiday season."
In addition, he said, spending patterns for Halloween are much different than they are during the Christmas season.
"During Halloween, people are kind of shopping for themselves, buying costumes, buying candy," he said. "Christmas is a gift-giving holiday, and you tend to think differently, depending on the economy. I think the economy is the best indicator as to what you're going to see this holiday season and, right now, we're in a weak economy."
Candy and costumes will continue to generate the most Halloween sales, with combined revenues of $3.3 billion expected this year, according to the survey.
"Parents come in and buy costumes for their kids first, and then they come in for themselves," said Debbie Kathman, store manager at Boomer's Halloween Express in Cincinnati. "We're very busy. People are spending."
She said some of the best-selling costumes continue the patriotic trend that was strong last year.
