Halloween Season Scares Up Big Profits for Retailers

The fall was once a "dead zone" for retailers. Business was graveyard quiet between the bustle of back-to-school buying and the monetary rewards of the December holidays. But now, with ever-increasing Halloween sales, the Great Pumpkin of Retail wears a big, toothy smile.

Consumers will spend more than $5 billion -- or $64.82 per person -- on Halloween this year, according to the National Retail Federation (NRF), and that number has been climbing steadily since 2003, when the per-person expenditure totaled $41.77. The figure climbed to $43.57 in 2004; $48.48 in 2005; and $59.06 last year.

"It's becoming a mega-business," says Albert Maslia, director of retail services at AmericasMart in Atlanta, where retailers flock several times annually to stock up on items for their stores. "It's moved away from being just a minor event. Now, it's a pop for retailers because, traditionally, October is one of the worst months in gifts and home furnishings."

But now, Maslia says, "Halloween gives retailers another shot in the arm."

The question is why? Both Maslia and Barton Weitz, University of Florida retail executive, venture that both manufacturers and retailers have trumped up the marketing of Halloween to the point that it has become a retail success.

That could be. But Richard Lachmann, associate professor of sociology at the State University of New York, Albany, thinks otherwise. "Certainly, retailers try to market every holiday," says Lachmann, but a holiday won't catch on unless the culture leads the charge.

"There's always been a base for children going out and trick-or-treating," the professor says, "but on top of that, Halloween has become an adult holiday as well. Much of the spending is adults buying fairly elaborate costumes, since more than two-thirds of households in this country don't have children anymore. And adults have more money than kids."

He has a point. Of total Halloween spending this year, according to the NRF, most – $1.82 billion -- will be spent on costumes. The average person will spend $23.33 on a costume, but young adults-- people in the 18- to 24-year-old age group -- will spend $34.06 on theirs.

Purchases of candy will be the second biggest Halloween expenditure at $1.55 billion; followed by decorations at $1.39 billion; and greeting cards at $310 million.

Hallmark alone stocks more than 440 different Halloween cards. Hot for 2007 are cards that sing songs such as "The Nightmare Before Christmas," "Bad Moon Rising," and "Purple People Eater." Another line of Halloween cards features swiveling heads, creepy characters, and tombstone shapes.

The scary side of Halloween is as old as the history of the holiday. Dating to pagan Celtic times, "It was a holiday about ghosts, about death," says Lachman. "And this is obviously a concern that we all have. If a thing scares us, often the best way to deal with it is to give it expression."

Then is it healthy that adults like to dress up for Halloween? Yes, Lachmann says. "It's a chance to present a different side of themselves, to be playful, to indulge in fantasy and turn themselves into somebody they can't be the rest of the year. It's always good, in some controlled way, to be able to give expression to your fantasy."

For retailers, Maslia says, Halloween begins in the spring and ends on October 31. "Most stores put the Halloween stuff out right into September now, so the buying is done in the spring. If a retailer tries to buy Halloween merchandise in July, it's too late."

By putting the merchandise in their stores in September, he says, they get about six or seven weeks to sell "because the day after Halloween, it's not worth a nickel."

But it's worth plenty of nickels in the early fall. And that fact makes the retail goblins really happy.