Retailers are bracing for frightful sales figures this year, as Halloween becomes the latest tradition to be disrupted by COVID-19.             

For the past several months, communities across the country have been grappling with how to safely celebrate this holiday.  Should gatherings be cancelled?  Should trick-or-treating be allowed?  Should we even bother dressing up this year?  Although the CDC has issued guidelines designating some of these traditional activities as “high-risk,” many Americans still want to celebrate in some way.  According to the National Retail Federation’s annual survey conducted by Prosper Insights & Analytics, more than 148 million US adults plan to participate in Halloween-related activities.  Though looking at the chart below, there does seem to be a trend toward the more contact-free activities.  

With that being said, spending is still expected to decrease by 8.3% in 2020 to $8.05 billion, compared to $8.78 billion in 2019, according to the NRF.  However, those individuals who will participate say they may actually spend up to 6.8% more.  In 2019, the average spend was $86.27, and those who say they’ll celebrate Halloween this year expect to spend an average of $92.12.  

Coresight Research, however, estimates a steeper dip in Halloween spending, which it expects to decline by 14% to 17%, according to a report from the research firm.  Among those celebrating the holiday year, 40% expect to spend less than in 2019, according to Coresight survey data.             

Naturally, stores like Party City will be hit the hardest.  Halloween accounts for some 20% of Party City’s domestic sales.  The retailer warns its investors that a poor Halloween season could harm its business.  According to the company, “An economic downturn, or adverse weather, during this period could adversely affect us to a greater extent than at other times of the year.” 

Because of the economic downturn and expectations of less sales, the retailer has scaled back its Halloween City pop-up locations by more than 90%.  It planned just 25 this year, compared to 275 in 2019.  At the same time, Party City’s hiring for the season is down far less, with plans for about 20,000 temporary employees, a decline of about 20% from last year.  In addition, they are focusing much of their energy on their omnichannel operations, such as BOPIS, delivery and curbside pickup in order to make their transactions more sanitary and appealing.  After all, they can no longer rely on having customers walk in to try on numerous masks and costumes like in years past. 

Their competitors have responded in suit.  Spirit Halloween, which runs far more locations than Halloween City even in normal years, is partnering with Instacart for same-day contactless delivery.  According to the company, searches for “Halloween” on Instacart are up 650% this year.  

However, this mindset is still to the detriment of the Halloween-specific retailers.  When consumers turn to ecommerce, it is often more convenient for them to add festive items to their already active shopping carts on Amazon, Target and Walmart.  These retailers carry a plentiful amount of Halloween inventory.  

And it’s important to note that it’s not all doom and gloom for other retailers either.  Just because Halloween is going to be done differently does not mean it is not going to happen at all.  People are still going to buy candy and costumes.  We just need to turn to new alternatives as well.  After battling a pandemic for seven months now, retailers are becoming well acquainted with finding new ways to conjure up some magic.