Halloween conjures images of witches, ghouls and goblins and can be a scary sight for little ones. But the holiday isn’t so spooky for the economy as consumers purchase billions of dollars of costumes, decorations and candy. In 2015, more than 157 million Americans celebrated the holiday, spending nearly $7 billion.
This year, more than 171 million individuals are projected to celebrate the holiday. With consumer confidence at its highest in nine years, Americans will spend a record-breaking $8.4 billion this Halloween season. The spending improves retailers’ bottom lines and serves as an important barometer for Black Friday and Christmas shopping. More people shopping at Halloween means that holiday shopping should be strong.
Most consumers are loading up on candy in order to quell the masses of costumed children arriving at their doorstep on Halloween. In fact, a little more than $2 billion of the $20 billion candy industry is primarily purchased around Halloween with 94.3 percent of shoppers stating they will purchase candy for Halloween 2016. This is a much larger percentage than costumes (67 percent) and decorations (70 percent). Somehow, candy corn is still the most popular candy during Halloween, despite having a not-so-stellar reputation.
As mentioned previously, 67 percent of Halloween shoppers will purchase costumes in 2016, not just for their children but even their pets. Yes, Americans spend $330 million dressing their four-legged friends and posting pictures on social media. Those with children spend about $1 billion a year on costumes for their kids. But parents like to dress up too. Adult costume purchases have increased tremendously in the last few years, with spending on adult costumes coming in at about $1.2 billion a year. In total, 2016 projections put the total spent on costumes at $3.1 billion, significant increases from the averages spent on adult, children and pet costume.
But that is not all as it pertains to adults and Halloween. The rise in adults participating in the festivities outside of trick-or-treating with their kids has steadily increased from the 1970’s to today, thanks in part to clever marketing by retailers and alcohol companies. In fact, alcohol sales spike around Halloween, especially if the holiday falls on a Friday with average liquor consumption seeing a 30 percent increase.
All this spending is good news for most state tax revenues, as sales tax applies to all purchases of candy. While some states deem candy to be groceries and thus do not tax them, in Florida this is not the case. As long as the candy is more than ten cents, it is subject to Florida’s sales tax plus any applicable local taxes. With Florida’s state sales tax coming in at 6 percent, it is safe to assume the state will bring in significant sales tax revenue from Halloween.
Halloween may not be the most frightening event of 2016, with the election season providing plenty of scares; however, the economic impact of Halloween is significant for Florida and the country.