Halloween is expected to generate nearly $9 billion in consumer spending this year. According to research from CREXi, consumers are expected to spend $3.2 billion on costumes, $2.7 billion on decorations, $2.6 billion on candy and $400 million on cards. Total spending will either by on par with or exceed the $9.1 billion spent on Halloween in 2017. Last year, Halloween saw the largest gains in consumer spending since 2016, and the holiday continues to drive retail sales activity.

“Aside from rapid sales of Donald Trump wigs and masks, increases are driven by a few factors: first, a strong economy and tax reform have created more disposable income allowing for more spending during the holiday season,” Eli Randel, VP of sales at CREXi, tells GlobeSt.com. “Second, while we believe e-sales of Halloween costumes are increasing, many of the big-box stores and malls which once sold costumes and decorations are struggling or out of business leaving a void in the brick-and-mortar market for the last-minute costumer. Last, Halloween remains a popular American holiday with homeowners always trying to one up their neighbor and college campuses around the nation rejoicing. Gone are the days of wearing a sheet and calling yourself a ghost. Extravagant costumes have become big business.”

Discount stores and Halloween stores are grabbing most of the consumer spending activity. Research shows that that consumers purchased 45% of Halloween goods at discount stores and 38% of goods for the holiday at Halloween stores. Grocery stores and department stores made up the remainder of the sales activity, accounting for 25% and 24% of activity, respectively. “Given increased sales revenue and a void in brick-and-mortar consumer options, demand from store operators for space has increased providing landlords with opportunities to fill vacancies at good rents,” adds Randel. “Owners of vacant boxes, some of which were once occupied by now-bankrupt retailers, are finding ways to capture up to another $20,000 or so of rental income.”

This bump in spending—in pre-holiday season—creates a good opportunity for landlords, especially to fill large vacancies temporarily with seasonal Halloween leases. To capture this business, Randel recommends landlords be “flexible, gritty and open-minded.” He says, “These stores aren't long-term credit plays, but they can add value and temporary foot traffic to a center. Work with your brokers to identify potential opportunities and don't hang up the phone if interest in your space is received. Don't accept tootsie-rolls or candy in lieu of rent and have your maintenance teams ready to clean up on November 1.”

This activity bodes well for consumer spending activity through the remainder of the year; however, 2019 could be a different story as there are already some changes in the economy. “While it won't be night of the living dead, we're beginning to see some minor corrections in the economy, which will mostly go ignored through the remainder of the year and holiday spending will be strong,” explains Randel. “2019 could get a little spooky where we see some pullback or flattened spending due to: increased debt-service resulting from higher interest rates, stock-market softening, flat income growth, and a possible increase in unemployment.”

Instant Insights /

How Much Does Halloween Boost Retail Spending?

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