Halloween is the second-largest commercial holiday and is certainly a real treat for kids and adults alike. Downtown Newburyport was a buzz on Friday night with costumed characters both small and tall filling the sidewalks to celebrate the candy-infused holiday.
According to the National Retail Federation, Americans are projected to spend a near-record $8.8 billion this year on Halloween. Costumes make up the biggest piece of the Halloween “budget” coming in at a monstrous $3.2 billion, followed by decorations at $2.7 billion, only a fraction above candy’s budget at $2.6 billion.
So whether you’re walking the distance for chocolate or other types of candy, it goes without saying that most of the candy eaten throughout the year happens in the few days before Halloween, but mostly in the days to follow. In the 2019 State of the Industry report, Candy Industry Magazine found that Americans consume $14.1 billion in sales of chocolate annually. This number is probably aided by chocolate’s other favorite holiday, Valentine’s Day. The report also found that non-chocolate candy saw $7.4 billion in sales over this past year.
While major holiday spending, like Halloween, can have positive benefits, does this short-term burst of economic stimulation help or hurt the economy? Economists are torn.
From candy and costumes to decorations and greeting cards, many economists believe that this sharp increase in seasonal spending positively affects the economy. In general, increased spending ignites economic activity leading to higher gross domestic product (GDP) and potential job growth.
Some argue that this seasonal spout of spending could hurt the economy because consumers are more apt to save prior to the holiday months as they lead up to Halloween (July, August, September), ultimately reducing gross spending during those months.
Many believe that the state of the economy is more capable of driving Halloween sales than Halloween driving the state of the economy. For example, in a down economy, consumers are less likely allocate money to “non-essential” goods like candy and costumes. So in essence, Halloween doesn’t have the ability to stimulate the economy if people aren’t spending on unnecessary items.
On the flip side, there are elements that economists cannot argue because they’re just plain good.
Spirit Halloween opens its doors in late August, early September with now over 1,300 pop-up stores across the country, a 5 percent increase from 2017. This pop-up style real estate model fills empty brick and mortar spaces where landlords may experience long-term vacancies. And short-term lease holders typically pay more rent than long-term tenants. Even in this short time, Spirit Halloween is to make a difference not only for spirited shoppers, but those who strive to make things a little less scary.
In 2007, the chain established Spirit of Children. This program has raised over $55 million to support the Child Life departments in hospitals around the United States and Canada. It’s mission to make hospitals less scary for kids and their families. 100% of every dollar collected is donated to fund partner hospitals. Spirit of Children has purchased a range of educational and entertainment toys, toys for children with physical challenges, and funded programs such as art music, and pet therapy, all in an effort to change the conversation toward play and having fun.
So, go out and have fun this Halloween, stay safe and enjoy your candy-filled pumpkin bowl. And be sure to call the dentist in the morning.
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About Stu: With more than 30 years of experience as a tax professional, Stu Steinberg brings a broad depth of knowledge to his work with his clients. Stu founded Erock Tax to help provide tax and financial planning strategies to individuals, families and small businesses and is passionate about empowering his clients through education about their money health. Stu is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.