October 30, 2008 in Business

SHOPPING LIFE

 

With a big pullback evident in consumer spending, candy makers were a bit spooked about this year’s Halloween season.

They introduced fewer new Halloween-themed products for their third-biggest selling season of the year, but analysts say the companies have nothing to worry about: They expect this year’s Halloween to be bigger than ever as people seek a break from the downright scary economy and stressful campaign season.

Candy makers, judging by the fewer debuts of Halloween candy this year, weren’t sure how the holiday would go because of the economy.

Research firm IBISWorld Inc. predicts that total retail spending will be up 5 percent this year to $5.77 billion, with one-third of that on candy. The two reasons for the boost? Higher prices as well as a need to escape from reality, IBIS says.

But facing widespread consumer weakness across many sectors, there was some hesitation by candy makers.

There were 35 new chocolate products for this season, compared with 49 last year. For sugar and gum confectionaries, new product launches went from 119 to 54 this year.

The stakes can be big if Halloween – or any specially themed – candies don’t sell. Leftover items typically are sold at a steep discount – often 50 percent or more – so retailers and candy makers may take a big hit to their profits. Most retailers try to avoid giving those big discounts and focus on selling their candy by Halloween, and they’ll use big promotions and seasonal displays to do it.

Sales this year have been strong, hitting $201 million of seasonal Halloween candy in the 52 weeks ending Sept. 6, up from $174.8 million last year, Nielsen reported. That number is about evenly split between chocolate and nonchocolate, with chocolate slightly ahead.

Prices this year are up 2.9 percent, which gives sales numbers a boost, but unit volumes were also up more than 10 percent to 81.7 million.

The season is an important one to candy makers, and last year the week of Halloween accounted for nearly 4.4 percent of their annual sales.

Halloween isn’t even the top holiday for candy. That is Valentine’s Day, then Easter. Halloween is a close No. 3, followed by Christmas.

Associated Press


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