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Spooky Spending: Increased Disposable Income Will Drive Halloween Spending

Halloween spending will continue its upward trajectory this year, as splurging on festive treats is expected to increase 6.2% in 2017. Improvements in the macroeconomic climate and a rise in the number of shoppers planning to participate in Halloween festivities will be the primary drivers of spending growth. According to IBISWorld estimates, in 2017, a 2.2% increase in per capita disposable income coupled with a 4.7% boost in Halloween participation will cause holiday spending to reach $8.0 billion.

Although spending across all product categories is slated to expand, sales of decorations and costumes will experience the strongest growth, while revenue derived from greeting cards and candy is anticipated to post lower gains.

High spending

IBISWorld estimates that the average US consumer will spend $44.86 on candy, costumes, decorations and greeting cards this Halloween, up from $44.24 last year. While this will serve as a boon to total Halloween spending, some product categories will benefit more than others. In 2017, IBISWorld expects demand for Halloween decorations to strongly increase, with consumers boosting their pumpkin and cobweb budgets by 8.2% over the year. Since outlay for decorations is expected to reach a lofty $2.3 billion, retailers that sell Halloween-ready household accessories will benefit from high demand this autumn. According to the NRF (National Retail Federation), 10.8% of consumers plan to shop at home décor stores for holiday goods, while 6.2% say they plan to decorate with items from home improvement stores. Supported by a boost in Halloween spending, IBISWorld expects that revenue will increase 1.8% for the Home Furnishings Stores industry in 2017 and 2.7% for the Home Improvement Stores industry.

Halloween Spending Chart

Consumer spending on costumes will make up the largest share of holiday spending this Halloween season, with the product category representing 35.6% of total expenditure. On top of sales of children’s costumes this year, according to the NRF, 48.2% of adults plan to dress up this Halloween, representing a 1.1% increase compared with last year. Additionally, 16.0% of consumers will festoon their furry friends in pet getups. Although most shoppers will turn to discount and specialty Halloween stores this year, an increasing number of consumers will visit department stores, craft stores and e-tailers to satisfy their costume needs. Over the five years to 2017, growing rates of internet access have encouraged consumers to make purchases from online-based businesses. This year, IBISWorld expects that 2.3% growth in the percentage of consumers making Halloween purchases online will help drive growth of 13.4% in the E-commerce and Online Auctions industry in 2017.

Creeping up

Spending on other Halloween must-haves like greeting cards and candy will also expand this year, though at a lower rate than decorations and costumes. While spending on sugary treats is expected to increase 5.1% for the year, consumer outlay for greeting cards will rise only 4.8%; despite growth for the year, overall spending on Halloween greeting cards has contracted over the five years to 2017, falling at an annualized rate of 1.1%. These slower rates of growth will pressure demand for retailers that sell these goods. For example, according to the NRF, the percent of consumers shopping at grocery stores will contract 1.2% in 2017. Lower demand for supermarkets this Halloween will pressure demand for the Supermarkets and Grocery Stores industry, contributing to a 0.7% revenue contraction during the year. The Gift Shops and Card Stores industry will experience a similar slowdown, with revenue rising only 0.5% in 2017.

Halloween Spending Infographic

 

Spooky Spending PDF

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