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Pandemic expected to hit Halloween sales

Darpan News Desk The Canadian Press, 23 Sep, 2020
  • Pandemic expected to hit Halloween sales

A Halloween night that falls on both a Saturday and a full moon would normally be ideal for candy, costume and decoration sales – and werewolves.

But experts say rising COVID-19 cases could put the kibosh on spooky festivities, curbing demand for supplies that usually deliver healthy profit margins for retailers from grocers to specialty pop-up stores.

Halloween sales could also serve as an indicator for what retailers might expect this Christmas, the largest shopping season of the year, experts say.

“I expect sales will be soft all around because of the lack of gatherings,” said Farla Efros, president of HRC Retail Advisory. “It will be scaled back, especially with restrictions coming back in place.”

Premier Doug Ford said earlier this month that Halloween will be a challenge, noting that he would prefer parents not take their children trick-or-treating.

“It just makes me nervous, kids going door-to-door,” he said.

However, Efros noted that “it’s not just children and trick-or-treating” driving Halloween sales.

“Adults normally spend a considerable amount of money,” she said. “But large gatherings and office Halloween parties just won’t happen this year.”

Retail analyst Bruce Winder said families and friends might plan their own “bubble Halloween” like a backyard celebration or scary movie night.

While people will still buy some candy, decorations and costumes, he said it likely won’t be as profitable as usual for retailers and candy manufacturers.

“Halloween is a really important category for a lot of retailers,” said Winder, the author of the book Retail Before, During and After COVID-19. “Outside of Christmas, it's the next biggest spend.”

He said candy is often used as a “loss leader” to drive traffic to a store, while decorations and costumes are profit-driving items with high margins.

Yet because consumers will be less likely to shop around for the best prices this year, Winder said some retailers might back off on price promotions to help offset COVID-19 costs.

Still, he said given Halloween inventory was likely ordered months ago in many cases, retailers are likely to “go for it as much as they can.”

“I don’t think retailers are going to change that much in terms of how they merchandise,” Winder said. “They’ll use Halloween as a bit of a barometer for the temperature of Canadian spending during the pandemic ahead of Christmas.”

Meanwhile, candy manufacturers are also bracing for a muted Halloween season.

Hershey Canada Inc. senior marketing manager Ola Machnowski said the maker of Halloween classics like Twizzlers, Jolly Ranchers and Reese's Peanut Butter Cups is expecting to see an impact from the pandemic.

“We are expecting a decline in sales,” she said, noting that the company has done some consumer insight work that points to a scaled-back Halloween.

Still, Machnowski said many Canadians are looking forward to celebrating in different ways, and will likely seek out treats and other supplies.

Yet she noted that it’s hard to predict what will happen over the coming weeks in terms of public health guidelines and restrictions.

“We’re trying to find the delicate balance between planning and being nimble,” Machnowski said. “We’ve been talking about Halloween probably since Easter, so it's very important to us.”

Meanwhile, Michael Ross, chief financial officer of discount chain Dollarama Inc., expressed caution regarding how sales of Halloween goods will develop this year.

Typically, Halloween is “a strong weight'” anchoring third-quarter sales for Dollarama – a mainstay for seasonal products including Halloween candy, decorations and costumes.

“We believe it will have a negative impact, but to what extent we don't know,” he said earlier this month of the pandemic’s impact on Halloween sales.

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