Halloween 2020: How Sweet It Is
I was asked by a reporter this summer if “we” (RSR) thought that seasonal events like Back-to-School and Halloween would be depressed by the coronavirus lockdown. The prevailing opinion was that both seasonal events would experience lower sales because of the stay-at-home lockdown and the resultant constraints on discretionary spending by consumers.
Although RSR isn’t in the business of predicting sales, and all of the partners have their own, unique views (look no further than my partner Paula's piece this week), my own sense was that the opposite would happen, and that when it came to “back to school” (BTS), families might find themselves in the position of spending more on technology and supplies than they otherwise might have done. Meanwhile, mega-retailers hedged their bets. Walmart and Target both predicted slightly softer sales. But the tech industry was hopeful; for example, Apple predicted that they would see strong BTS spending. Overall, the industries that depend on consumer spending remained guardedly optimistic.
That turned out to be the right angle. On September 3rd, website Globest.com (a site that focuses content towards commercial real estate developers) summed up BTS results:
“What is good news all around for retailers is the weekly progression of store visits since the week of July 13. Office Depot, Staples and Best Buy all saw significant increases week to week leading up to August 3, where Office Depot and Office Max peaked before seeing a slight decline for the week of August 10. Staples continued to see growth the entire way through, peaking at 19.8% growth through August 10... Walmart and Target... didn’t see as much of an increase as the other stores during the weekly periods examined, but they also didn’t see as much of a drop as the others that depend much more on the basics of school and office supply.”
As for Apple, the company reported a record quarter on July 31st. The results were led by the Mac and the iPad, and Mac sales in particular were only slightly lower than during last year’s holiday and back-to-school quarters. So, the bottom line on BTS seems to be that the retail industry dodged a bullet, and didn’t experience a feared depression in sales.
What about Halloween? Perhaps “too” jokingly, I suggested that in depressing times, people eat chocolate. It turns out that that is probably true. In 2019 the University College London released the results of a study that concluded that, “... consumption of chocolate, particularly dark chocolate, may be associated with reduced odds of clinically relevant depressive symptoms.”
All joking aside, Halloween is shaping up to be a boon for retailers. That would be consistent with the historical trend; in the U.S., the National Retail Federation has reported a generally upward trend in consumer spending on the event since 2016:
|Year||# U.S. Consumers Celebrating||AVG Spending Per Buyer||Total Spending*|
|2012||170 million||$79.82||$8.0 billion|
|2013||158 million||$75.03||$7.0 billion|
|2014||162 million||$77.52||$7.4 billion|
|2015||157 million||$74.34||$6.9 billion|
|2016||171 million||$82.93||$8.4 billion|
|2017||179 million (Record)||$86.13||$9.1 billion (Record)|
|2018||175 million||$86.79 (Record)||$9.0 billion|
|2019||172 million||$86.27||$8.8 billion|
As we head into October, it looks like retailers can look forward to a healthy Halloween sales season. On August 29th, Fortune reported:
“A recent survey conducted by the Harris Poll on behalf of the National Confectioners Association is giving candy companies a sign of hope: The results found that 74% of "millennial moms" and young parents say Halloween is more important than ever this year. ‘We think that consumers will find creative and safe ways to trick-or-treat. It is an outdoor event, and it’s an event where a lot of masks are already worn,’ said Hershey CEO Michele Buck on the company’s earnings call last month.”
Subsequently, on September 28th the Associated Press reported that, “Sales of Halloween candy were up 13% over last year in the month that ended Sept. 6, according to market research firm IRI and the National Confectioners Association. That’s a bigger jump than the usual single-digit increases. Sales of Halloween chocolate alone are up 25%.”
There are a lot of reasons why this would be the case. For starts, after months of lockdown, kids and their parents are looking for some fun. The AP piece quoted a consumer as saying that “I’m sure people are just excited for a little sense of normalcy.” There’s more than a little truth to that, as we all know. But another aspect of this is that Halloween is a really affordable event. As the NRF numbers above show, consumers can have a good time on Halloween for about $90. By comparison, the average Christmas holiday spend for Americans is ten times greater - over $900!
Nonetheless, it’s still important for consumers and retailers to remember that we are in the midst of a pandemic. None other than the U.S. government Center For Disease Control (CDC) has issued some advice to the population. The CDC identifies these high-risk activities:
- Participating in traditional trick-or-treating where treats are handed to children who go door to door
- Having trunk-or-treat where treats are handed out from trunks of cars lined up in large parking lots
- Attending crowded costume parties held indoors
- Going to an indoor haunted house where people may be crowded together and screaming
- Going on hayrides or tractor rides with people who are not in your household
- Using alcohol or drugs, which can cloud judgement and increase risky behaviors
- Traveling to a rural fall festival that is not in your community if you live in an area with community spread of COVID-19
In an effort to be helpful, the CDC also suggested these activities as reasonable alternatives:
- Carving or decorating pumpkins with members of your household and displaying them
- Carving or decorating pumpkins outside, at a safe distance, with neighbors or friends
- Decorating your house, apartment, or living space
- Doing a Halloween scavenger hunt where children are given lists of Halloween-themed things to look for while they walk outdoors from house to house admiring Halloween decorations at a distance
- Having a virtual Halloween costume contest
- Having a Halloween movie night with people you live with
- Having a scavenger hunt-style trick-or-treat search with your household members in or around your home rather than going house to house
It’s hard to tell if consumers are paying much attention to the CDC, or if retailers are encouraging these “safe” activities. What is true is that retailers are looking for some good news. Halloween is more than just a fun one-time event; it’s also an early indicator of consumer confidence as we head into the all-important holiday season. Retailers are looking for Halloween confections to do for the industry what dark chocolate apparently does for individuals.
Pass me another truffle, please!