Halloween

Pandemic haunts Halloween retail

October 13, 2020

Q&A

Finance professor Tom Arnold frequently shares insights about retail trends. This year he’s been quoted about Halloween retail in more than 75 publications, including the Los Angeles Times and Daily Star. Here he discusses how in 2020 businesses may experience a very different Halloween. 

How will COVID-19 affect Halloween this year?

Traditionally, Halloween is a social holiday with children trick-or-treating in the neighborhood and many adults and families participating in haunted amusements. COVID-19 will change the tradition but will not stop the holiday completely.

In 2019, the National Retail Federation reported Halloween sales of $8.8 billion. Candy makers, buoyed by positive results from Easter candy sales, are cautiously optimistic about Halloween sales. Hershey (Halloween makes up about 10% of annual sales) anticipates families finding other ways to celebrate Halloween that will still involve distributing candy in some form or another.

 

Families will likely have their children dress up for the holiday. However, the lack of costume parties, haunted houses, and other Halloween amusements will likely blunt this sector of costume purchasing.
headshot of Tom Arnold
Tom Arnold

Professor of Finance, Joseph A. Jennings Chair in Business

According to Hershey, trick-or-treating makes up about half of candy sales during the holiday with the other half being self-consumed. The latter may be enhanced by the pandemic like other stay-at-home staples. However, both Hershey and Mars Wrigley have stated that they are strategically packaging products to have the right mix of Halloween-themed and everyday-themed candy available. Some stores offered Halloween candy earlier this year in an effort to boost sales. This could mean less Halloween candy on the shelves for opportunistic after-holiday purchases. 

Will costumes be worn?

Costumers appear to be open for business, but it is uncertain as to what is to be expected.  Families will likely have their children dress up for the holiday. However, the lack of costume parties, haunted houses, and other Halloween amusements will likely blunt this sector of costume purchasing. Recent stock performance for Party City has been volatile and generally negative, which gives an indication of what investors are anticipating for the last quarter of the year.

What businesses will struggle the most during Halloween?

The most impacted by the pandemic this Halloween will be the amusement parks and other entities that rely on Halloween-themed visitors/tourists. The pandemic makes large gatherings impossible, and many have simply canceled Halloween celebrations. I suspect that similar Christmas-themed celebrations will eventually be canceled as well.

This is unfortunate, because late year holiday celebrations have become a means for amusement parks to earn revenue even though days are getting shorter and the weather is becoming much cooler. Given the impact of COVID-19 over the summer, this additional revenue opportunity would be very welcome.

What will be curious to see is if new innovations are introduced for Halloween. It would not surprise me if an “electronic” or “virtual” Halloween is created in which families can credit each other a candy/food coupon or a small sum of money on an internet page/application virtually after visiting the application in costume. I imagine it as a GoFundMe-type application for trick-or-treating. Currently, I am not familiar with a particular app being in existence, but I am certain one is in development or is ready and simply waiting for an opportune time for introduction. Perfecting such an application at Halloween could create an opportunity to expand it for the gift-giving holidays that occur at the end of the year.