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, said Marcia Mogelonsky, a senior research analyst with Mintel International in Chicago. But as the economic situation worsens, and worries mount about investments and job stability, Halloween seems to be getting stronger.
“Halloween for grown-ups is a chance to let off some steam, and for kids, it's a chance for grown-ups to prove to kids the world is not falling apart. We still have Halloween,” she said.
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.
Parents such as Bonnie Raimy are planning big Halloweens this year. Her home, with its candy corn lights and ghosts hanging from trees, was the first one decorated for Halloween on her street in Madison, Wis. The holiday is a big one for her family, which includes 7-year-old son Noah, who will dress as Boba Fett from the Star Wars movies.
“I think people still want to get together and celebrate and not … be miserable all the time,” she said.
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, Mogelonsky said.
For sugar and gum confectionaries, new product launches went from 119 to 54 this year.
“It says to me that manufacturers are perhaps going into the holiday season a little more cautiously than they did last year because it's very hard to sell that stuff after Halloween. You lose money on it when you mark it down after Halloween,” she said.
Hershey Co. President and Chief Executive Dave West voiced concern in his company's recent third-quarter earnings call when asked about the effects of the economy and price increases, which many food makers have implemented to help recoup high input costs.
“So particularly in these economic times, as we head to the fourth quarter,” he told investors, “we are cautious about what we put into the system for both Halloween and the holidays.”
Ryan Bowling, a spokesman for Mars Inc., the maker of M&Ms and Snickers, said the number of varieties the company produced for Halloween did not change this year.
“It's still business as usual,” he said.
Bowling noted that Mars Inc. has enhanced its Web site, including having a virtual haunted house, and is holding promotions to drive the season's sales.