Halloween Previews 2020 Holiday SpendingBy admin_45 in Blog
You likely saw headlines today on how US consumer spending slowed in August, so here’s a quick update to put it in perspective:
- Advanced retail sales (excluding food services) rose by 5.1% y/y in August.
- While the latest reading was lower than +5.7% and +5.5% in June and July, it was still above +4.7% at the start of the year in January.
- The worst reading on record was -15.3% y/y this past April.
Bottom line: yes, retail sales grew at a slower rate last month, so how will the balance of 2020 fare? Given that Halloween serves as a useful proxy for consumer spending going into the Holidays, here are the key takeaways from the National Retail Federation’s Annual 2020 Halloween Spending Survey just out (conducted with 7,644 consumers from September 1-9):
- Overall Spending: While consumer spending is expected to hit only $8.05 billion versus $8.78 billion last year (down 8.3%), those celebrating plan to spend $92.12 on average or 6.8% more than $86.27 in 2019. That per-person expected Halloween spend is the highest since the survey started in 2005.
Although fewer young adults (aged 18-24) are celebrating the holiday this year (even though it falls on a usually party-friendly Saturday), “the ones who are aren’t shying away from Halloween-related purchases, spending $11 more on average, primarily on decorations and candy.”
- Spending categories: Consumers are spending more this year on home decorations ($29.63, +14%), candy ($27.55, +9%) and greeting cards ($5.03, +32%).
- Participation: Over 148 million US adults plan to celebrate Halloween this year, down from 172 million in 2019. Overall, participation dropped to a little over half (58%) of respondents from 68% last year, and over three-quarters blame COVID-19 for altering their plans. For example, “plans for parties, trick-or-treating, handing out candy and visiting haunted houses have all dropped” given social distancing guidelines. That said, 17% still plan to celebrate virtually.
At-home activities, such as plans to decorate homes (53%), carve pumpkins (46%) and dress up pets (18%) ranked as the most popular activities given that they are safer under COVID.
- Timing and destinations: The report notes that consumers have had more time to Halloween shop this year, therefore “starting earlier with four in 10 planning to begin their shopping in September or earlier.”
The top places Americans plan on shopping “remain the same: discount stores, specialty Halloween stores, grocery stores and online retailers.” Even still, 30% plan to shop online for the holiday, up from 25% last year.
The upshot: there are only 72 days until Black Friday, so consumers’ plans to spend a record figure individually on Halloween this year sets a positive tone going into the most important season for retail sales. While fewer Americans plan to celebrate the holiday in 2020, a greater share of Halloween shopping has shifted online as the COVID Crisis continues to accelerate online versus physical consumer spending. With Black Friday/Holiday deals already trending that way in recent years, consumers may have more time on their hands like with Halloween to take advantage of them in the safety of their own homes.
Just like Americans turned to more local trips and backyard barbecues with family and friends over the Summer, Holiday 2020 will also likely look different with people staying closer to home. On the plus side, fewer vacations potentially mean more holiday gift shopping in November/December. Retail sales may have slowed of late along with a cut in extended unemployment benefits, so another stimulus bill would of course help. Nevertheless, this survey was taken at the beginning of this month weeks after the end of the $600 weekly stimulus ended and Americans still planned to spend a record amount on this Halloween. That’s an overall upbeat signal for the rest of 2020.