Ready-Made Costumes and Small-Ticket Items to Boost Halloween Spending 11.7 Percent from Scary Recessionary Lows

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While the recession lingers, consumer spending is slowly but surely regaining its strength. Accounting for about 70 percent of total GDP, consumption is expected to grow throughout 2011, especially as holidays like Halloween approach. Even though the holiday falls on a Monday this year, overall Halloween spending is expected to post strong growth of 11.7 percent from 2010 to $5.9 billion, according to industry research firm IBISWorld. This jump can be contributed to a few trends: greater spending on small-ticket items like candy and decorations, a shift back toward ready-made costumes that are generally more expensive than the do-it-yourself (DIY) options of recent years and an overall rebound from record-low sales during the recession.

IBISWorld Market Research

IBISWorld Market Research

Consumer spending on the holiday is expected to grow, but the value is still far below its peak of $6.7 billion in 2006 and even below the $6.3 billion total in 2008.

IBISWorld retail analyst Nikoleta Panteva estimates that Halloween spending fell 31.8 percent in 2009 to $4.3 billion. “So although an almost 12 percent increase in sales seems significant, it is primarily a rebound from recessionary sales declines,” she said. “Consumer spending on the holiday is expected to grow, but the value is still far below its peak of $6.7 billion in 2006 and even below the $6.3 billion total in 2008.” Nevertheless, IBISWorld expects spending in various categories to fare well this Halloween.

Costumes
As the biggest spending category, accounting for 35.7 percent of total Halloween sales, costumes is expected to grow 13.7 percent in 2011. Costume makers are providing increasingly cheaper options for consumers, which are allowing Americans to buy new items this year. 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. IBISWorld expects a shift back toward ready-made costumes this year, instead of the do-it-yourself (DIY) versions that were popular from 2008 to 2010, as growing consumer spending is pushing people to buy costumes and save time.

Candy
Despite the climbing price of chocolate over the past year, consumers are unlikely to tame their sweet tooth since price increases or even tight budgets don’t heavily affect inexpensive indulgences like Halloween candy. IBISWorld expects candy sales to account for 30.6 percent of total Halloween spending, an increase of 10.0 percent from 2010 to $1.8 billion. Increased candy sales are likely to benefit major confectionary companies like Mars Inc. and The Hershey Company. And because price increases will not reduce volume, these players will experience higher revenue and even higher profit margins.

Decorations
Halloween decoration spending is expected to increase 12.1 percent to $1.7 billion over the year. Increased visibility and availability of decorations will draw consumers to spend more on these items. Additionally, consumers are more like to make higher-priced decoration purchases this year than they did last year because of their stronger sentiment toward the economy and their financial situations.

Cards
Greeting card sales, which account for 5.4 percent of total Halloween spending, are forecast to increase 6.8 percent this year to about $320 million. This decent growth is despite the dying Greeting Cards and Other Publishing industry’s poor performance over the past five years as both concerns about the environment and the popularity of e-cards over printed products increase. Nevertheless, a small increase is expected for the greeting cards industry through 2011 as the category bounces back from its previous lows.

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About IBISWorld, Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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