Halloween supply problem could be haunted by ‘huge demand’
Baruch Labunski’s Halloween atmosphere on the streets of Toronto has been weird over the past two years – and not in the way of witches and elves.
“During the pandemic, no one really decorated and there were almost no children,” he said.
This year, pumpkins have been sitting on his neighbor’s doorstep since early September and his son has picked out a costume.
“It feels like we’re getting back to normal,” he said. “I think Halloween will be bigger than ever.”
After two years of COVID-19 restrictions restricting Halloween, Canadians are expected to step up their celebrations this year.
But rising commodity costs and ongoing supply chain problems could dampen demand for apparel, confectionery and decorations.
New research by the Retail Council of Canada shows that 86% of Canadians will spend as much or more on Halloween this year than they did last year, with more shopping a month in advance.
Consumers also appear to be willing to open their wallets to buy a trendy new outfit or buy candy, with more than half of Canadians celebrating plans to spend more than $50.
“I think Halloween is going to be filled with huge demand,” said Tandy Thomas, associate professor at Queen’s Smith School of Business.
“Halloween spending will likely mimic the strong consumer behavior we’ve seen on travel and restaurants in recent months. There’s a lot of kids who haven’t really figured out the trick. in two years it will be very uncomfortable to go back there.”
That being said, Canadians feeling the pressure of soaring inflation may eat less money, turn off their porch lights early, or opt out of Halloween altogether.
Shoppers may also feel stifled by so-called deflation in the candy aisle – manufacturers put fewer chips in bags or candy in boxes but still charge the same price.
“You could see more dark houses if people are concerned about the cost and decide not to participate,” said retail analyst Bruce Winder.
Potentially strong demand coupled with continued constraints in the supply chain could also lead to some empty shelves – especially in late October.
Winder says part of the problem manufacturers and retailers face is unreliable forecasts.
“The hardest part of the supply chain is predicting demand,” he said. “But that’s especially hard to do right now because each season is a new way that consumers are behaving as they weather the pandemic.”
Depending on how the demand plays out, the potential scarcity can be especially severe in the candy aisle.
“I think there might be a supply shortage,” Thomas said. “It will be harder for retailers to buy inventory, which means there may not be too many and deep discounts on November 1.”
Also, running to a pharmacy on Halloween night to replenish supplies may not be an option for those who underestimate the amount of scams or treatment they will receive, she said.
Hershey Co.’s CEO Michele Buck recently said that “capacity is limited” in some parts of the company’s portfolio.
The maker of Reese’s Peanut Butter Cups prioritized everyday products that were available on the shelves to meet growing demand in that area, but had to limit seasonal items, she said.
“We have the opportunity to offer more Halloween, but we can’t deliver,” Buck said on an earnings call in July.
Despite capacity constraints, the company has produced more Halloween candy this year than last year, said Hershey spokeswoman Allison Kleinfelter.
But she still recommends shopping early.
“Over the past two years, consumers have purchased seasonal candies earlier than before,” said Kleinfelter. “This means that often a week before the actual holiday, seasonal packages can be harder to buy.”
Retail Council of Canada spokeswoman Michelle Wasylyshen said the best advice for consumers is to shop early.
“We’ve heard from a number of retailers that they’ve had a lot of supply chain challenges with Halloween products this year, where suppliers weren’t able to deliver the required quantities,” she said.
“This means there may be fewer quantities available for some of the key Halloween products.”
Labunski of Toronto said he’s not worried about stock shortages although he expects a recovery over Halloween.
“I think people will go all out and so retailers will probably sell out of some popular items,” he said. “But I can buy something else.”
Spirit Halloween, one of the largest costume retailers, says it has a full range of costumes, decorations and accessories.
Steven Silverstein, CEO of Spirit Halloween, said in a statement: “We work year-round to develop the must-have look, and 2022 is shaping up to be an incredible year.
When it comes to apparel and decorations, Canadians worried about inflation could come up with creative ways to cut costs this year.
“We’re going to see some bargain hunting,” says Thomas. “People can sew an outfit by hand or find a used outfit.”
People will also cut back on less essential items, Winder said.
“They can reuse decorations from previous years or buy it at Dollarama to save money.”
This Canadian Press report was first published on October 2, 2022.