Halloween is back: People are shelling out for candy, costumes, and decor after a quieter 2020

• Consumers are expected to spend a record $10.14 billion on Halloween this year.
• Spending on Halloween candy has already surged: sales jumped 29% vs. 2020, per Numerator data.
• But some retailers warn that decor and costumes are getting caught up in supply chain snarls.

Halloween may have taken a bit of a hiatus last year, but it's come back in full force in 2021.

Ahead of Halloween weekend – the holiday falls on a Sunday this year – sales of candy, costumes, and decor are soaring across the US, with consumer spending expected to reach an all-time high of $10.14 billion. It's an increase of over 20% from last year, when consumers spent $8.05 billion on Halloween.

That's according to a National Retail Federation survey of 8,061 consumers conducted by Prosper Insights & Analytics in September. NRF found that consumers plan to spend $102.74 on average – $10 more than they planned to spend in 2020 – on items like decorations, costumes, and candy.

According to data from Numerator, people have already purchased more Halloween candy than they did in 2020 – more, even, than in 2019. Numerator's data showed that sales of seasonal candy have jumped 29% in the second half of the year versus the same period last year, and 43% compared to the second half of 2019.

Candy-industry executives told AdWeek's Paul Hiebert that they're expecting a big year after a dip in 2020.

"This year we are, and continue to, anticipate a strong rebound for trick-or-treating," Timothy LeBel, president of sales for Mars Wrigley US, told AdWeek.

John Downs, president and CEO of the National Confectioners Association, told AdWeek that "chocolate and candy sales have come roaring back during the 2021 Halloween season."

Still, costumes are expected to be the top-selling category. The NRF survey found that consumers plan to spend a total of $3.32 billion on costumes, topping 2018, 2019, and 2020 levels.

Fewer costumes, more decor in 2020

This is likely welcome news for retailers who were hit hard in 2020, particularly those who sell costumes. Business owners told the Washington Post's Abha Bhattarai last October that prior to the pandemic, they were expecting a massive Halloween season, given that the holiday fell on a Saturday and a full moon. But one shop owner in Virginia said sales dipped 80% instead.

"I've never been this worried before," he told the Post at the time.

Rather than shell out for costumes, many consumers shifted the way they celebrated. According to the NRF survey from last year, decorating homes became the second-most-popular way to observe Halloween, after handing out candy, with 53% of respondents saying they planned to decorate versus 49% the year prior.

As Insider's Mary Meisenzahl reported last year, Lowe's began noticing Halloween decorations, especially large, outdoor inflatables, becoming more popular in 2020. And Home Depot had a breakout hit with its $320 12-foot-tall skeleton, which sold out so quickly that fans were offering to buy them secondhand for thousands of dollars, the Post's Maura Judkis reported at the time.

(Home Depot later said during an earnings call that the skeleton sold out before October last year and helped drive record sales for the company. The skeleton is selling out this year too.)

Supply-chain issues could hit the Halloween industry

But the Halloween industry may not be immune to the supply chain pressures that are hitting seemingly every other industry at the moment.

Demand, combined with shipping snarls, could lead to costume shortages in some parts of the country, MLive reported, citing data from the Halloween and Costume Association, a group that represents costume manufacturers.

"The fact that costume and decor sales are up 20 to 25%, coupled with pandemic-related supply issues, have resulted in empty shelves all across the country," Gregor Lawson, chairman of the HCA and founder of spandex bodysuit-maker Morphsuits, told MLive.

Lawson added that the association is expecting "a complete sell-out this year."

A Cedar Rapids, Iowa-area costume shop-owner told local ABC affiliate KCRG earlier this month that the store had spent $12,000 on inventory and only $500 of it had arrived.

"Accessories are hard to get, masks are hard to get, costumes, pretty much everything," Jacob Cowger, the owner of Balloon's Etc. & Costume Emporium, told KCRG. "In my 11 years, this has been the toughest."