5 things to know about how consumers are shopping for Halloween

Episode transcript, edited for clarity.

Bill Thorne: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone, everywhere, every day. I'm Bill Thorne from the National Retail Federation, and on today's episode, we're getting into the spooky spirit with NRF's Head of Consumer Research, Katherine Cullen.

NRF has announced that spending on Halloween is expected to reach a record $12. 2 billion. That's billion with a B. And today, we're diving into the top five things you need to know about the fun ways consumers are celebrating, shopping and spending this scary season.

We know our listeners love our Halloween data. It's one of the most popular surveys that we do. So today we've asked you to come prepared with five things we need to know about how consumers are shopping for Halloween. Are you ready?

Katherine Cullen: I am.

Thorne: All right, Katherine, you're on. First off, what's the big picture?

Cullen: Well, the big picture is that Halloween is more popular than ever. As you noted, total spending is expected to reach $12. 2 billion. That's up from a little over $10 billion last year. But the big headline is that more people are celebrating Halloween than we have ever seen. Nearly three-quarters of U. S. adults say that they expect to celebrate the holiday. That is up from just under 70% last year. But if we look before the pandemic, before lockdowns and all of that happened, just 68% of U.S. adults were celebrating, so we've really seen an increase in the holiday’s popularity, and that is what's driving spending this year.

Thorne: It's amazing. I mean, three-quarters of the adults say they are going to celebrate Halloween.

Cullen: Yes, and they're celebrating in a lot of different ways, which leads me to my second point. We're seeing a resurgence in pre-pandemic activities, so things like Halloween parties and even trick-or-treating that have remained popular, particularly for families, but are a little lower than they were before the pandemic. Those are back up to pre-pandemic rates. We're seeing about a third of U. S. adults who are celebrating say that they plan to attend or host a party. And then parents are turning out in force to trick-or-treat with their kids, so it really does feel like Halloween is back.

Thorne: You know, with those numbers, if I don't get invited to a party, I must be a real loser. I mean, a third. All right. Well, I hope I picked my friends carefully. It's not all Gen Z though, right?

Cullen: Correct. You know, for a long time our data has shown that young adults — at first millennials and now Gen Z — have really been driving the growing popularity of Halloween, because this isn't just this year, this has been building over time. But what we're seeing this year in particular is it's not necessarily just those college age students, younger consumers who are getting out there. A lot of this is being driven by millennials and older millennials who are planning those parties, getting dressed up in costume and really seizing onto this holiday.

Some of it may be driven [by the fact that] these consumers are more likely to have kids. We know a lot of home buying happens, so maybe people are looking to decorate their new house, but it is really that more — I hesitate to say middle age, applying to my own demographic, but...

Thorne: Yeah, don’t go there. And definitely don’t say older and then start giving out numbers.

Cullen: Well, consumers who are below the age of 45, but above the age of 25, are driving a lot of the interest in some of those traditional Halloween activities this year.

Thorne: Well, look, is all of this inflation? Is that why the numbers are so big?

Cullen: No, we know that inflation is certainly top of mind for consumers. It's been one of their biggest areas of concern over the last year or so. But what we're seeing is that there's actually a lot of easing in inflation lately, particularly on goods. You might actually be seeing some disinflation in some of the things that you're buying, but of course, consumers may expect to see some higher prices on some items.

What we're seeing, however, is that the increase in spending is really being driven by more people celebrating the holiday. On a per-person basis, people are expecting to spend about $8 more than they did last year, which is still $108 on Halloween.

Thorne: Which is still a lot. Yeah.

Cullen: But again, it's nearly three-quarters of U. S. adults saying that they're celebrating the holiday this year and that is a significant increase over last year and over the last several years.

Thorne: And we're returning to pre-pandemic norms, correct?

Cullen: Exactly. So, if more people are celebrating and more people are planning parties and more people are trick-or-treating, you have more occasions you need to purchase for, whether that's decorations, costumes or candy.

Thorne: So, number four. The one that everybody always asks about, and I could have predicted this one, I think: Top costumes, kids and adults.

Cullen: Well, as we've known for the last few years that we've done this, the very top costumes don't tend to change that much. For adults, it tends to be a witch or a vampire. For kids, it's Spider-Man or a princess. But this year was very exciting because we did see some new costumes come up into the top 10 and, probably not to anyone's surprise, a lot of it was influenced by the year's top movies and shows. So, Barbie came in as the number three costume for adults.

Thorne: Number three? I'm shocked that it is three.

Cullen: Did you not see the movie?

Thorne: I will, promise, I will. I've got to be able to talk to people about it, so I've got to see it.

Cullen: There's a lot of options for Barbie-themed costumes there. And then for kids, it also came into the top 10, but we also saw Mario come into the top 10 for costumes for kids, and Wednesday Addams, that TV show, also popped up. Not quite in the top 10, at number 12, we also saw Paw Patrol as a top costume for kids. We know there’s a movie coming out around Paw Patrol. You may not know, Bill. I do because I have younger children. A Paw Patrol movie coming out that there’s a certain demographic waiting with bated breath. But all of that is really impacting costumes this year in a really fun way, for us at least, to see some new ideas and new inspiration coming out.

Thorne: So, pets. I know that people love dressing up their pets. I happen to be married to somebody who looks forward to that every single year and I know what's going to happen. I’m just bracing myself, as is the dog. What is the spending and what are the costumes?

Cullen: Well, I was also excited to share this stat with you, Bill, because for the first time in a long time, we're actually seeing interest in pet costumes level off a little bit.

Thorne: Oh, praise the Lord.

Cullen: So, this was one of the areas we did see an increase in spending on adult costumes and kid costumes, but pet costumes were pretty similar to last year, coming in at around $700 million, which is still a lot of pets being dressed up. And…

Thorne: I’m going to guess: Taco? Hot dog?  Am I close?

Cullen: You got one of them. Hot dog is a very popular costume for pets.

Thorne: How about a dinosaur?

Cullen: It's really creative. I think you have some great ideas. They are actually a pumpkin, a hot dog and a ghost is pretty popular as well.

Thorne: Well, we've got the pumpkin outfit in the house. But the problem is you see them everywhere.

Cullen: Yes, people definitely gravitate towards that. It's a great way for some folks to get in the spirit and to incorporate everyone in their household in Halloween. But as I noted, it might be leveling off a little bit in popularity, which might be good news for you and for your furry friend.

Thorne: Well, I think the good news is that people are recognizing that dogs have feelings too, and getting dressed up in costume … I mean, if you could see the look in Roscoe's eyes, it's just disturbing. It's just like, “Why me? Why now?”  

Anywho, so a preview of the outlook as we head into the holiday season. What are we looking for at NRF as we head right into the spiraling Christmas/Hanukkah time of year?

Cullen: Well, a few things to keep in mind. One, Halloween does signal to us that consumers are still prioritizing special events. They might be feeling inflationary pressures in different aspects of their lives. They might be pulling back on some areas or maybe they're spending more on travel so they’re thinking about how to rebalance their budget, doing those common-sense things. But when it comes to holidays and special events, they're still investing a lot of their time, their energy and, of course, their shopping.

Of course, Halloween is not a gifting holiday and it's one day versus an entire season, but it is a good signal to us. The other thing we're learning from Halloween is that consumers are starting early for all of these major shopping events. It's become really clear to us that back-to-school starts in June, Halloween starts in September and the winter holidays start in October, so consumers are really shifting up their shopping, and they'll spread it out all season long. But this is a trend that's certainly here to stay, so as we quickly enter that October timeframe, I think we'll expect to see a lot of holiday shopping already began.

Thorne: Yeah, I remember when I first started at the NRF, we got calls all the time from reporters saying it seems like it's getting earlier and earlier every year that people are starting their Christmas shopping and that retailers are putting out the Christmas items and the good news is that has dropped off precipitously. Nobody asks that question anymore because it's just an accepted fact. It really does start right around Halloween and sometimes before.

Cullen: But the thing is retailers are responding to what consumers want.

Thorne: Correct. Yep.

Cullen: People want to start shopping early. They like it. It lets them balance or spread out their budget and helps them avoid stress, so this is retailers responding to consumer demand and they're doing it across most major events.

Thorne: It is, you know, if it didn't work, if they weren't selling, then they wouldn't do it. But they're selling, so they respond to the consumer. The consumer wants it, the retailer's going to provide it.

Cullen: Well, I think we might have covered a few more than five points, but this was a really fun discussion.

Thorne: Well, they’re all important points. I really do appreciate the insights. Now speaking of the holiday season, I mean, holiday is right around the corner. What is your thinking about that? Are we going to be doing anything forecasting and when is that going to happen?

Cullen: Well, yes, we are getting ready to release our holiday data. We'll be starting in October with our first release of consumer spending plans for gifts and then we'll be following up in November with our economic forecast for the season, so stay tuned. You can keep track of all of this at NRF.com where you can find both our Halloween data, which has already been published, as well as all of the holiday data we will be releasing through the rest of the year.

Thorne: Okay. Last question. Katherine Cullen, what are you dressing up as this Halloween?

Cullen: Every year, I keep it simple. I am a cat.

Thorne: Katherine “cat” Cullen. That's very …

Cullen: It's easy. I focus on my kids’ costumes.

Thorne: What are the boys?

Cullen: One is going to be a firefighter, and the other is going to be a dinosaur, specifically a T-Rex.

Thorne: Oh. Yeah. Okay. T-Rex, they're very, very dangerous. Katherine Cullen, as always, it was a pleasure talking with you. Thank you for joining us today.

Cullen: Thank you so much, Bill

Thorne: And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at RetailGetsReal.com. I'm Bill Thorne. This is Retail Gets Real. Thanks again for listening. Until next time.