US Halloween 2015 - Deborah Weinswig

 HOLIDAY 2015
October 7, 2015
US Halloween 2015
Ghosts and Goblins Get to Roam Free
on a Scary Saturday Night
The National Retail Federation (NRF) forecasts that Americans w ill spend $6.9 billion on Halloween this year, down from $7.4 billion last year. Halloween falls on a Saturday this year, which gives consumers additional opportunities for shopping for costumes, decorations and candy before the evening festivities. Princess costumes remain the m ost popular children’s costumes for the 11th year in a row; other popular choices include Star Wars, Frozen and Minions characters. Pet costumes are a $350 million market. An NRF survey found that just 17% of respondents said that the state of the US economy was causing them to cut back on Halloween spending. DEBORA H W EINSWIG
E x e c u t i ve D i r e c t or –
H e a d of G l o b al R e t ai l & Te c h n o l o g y
F u n g Bu s i n es s I n t el l i g e n c e C en tr e
d e b or a h w e i n s w i g @ f u n g 1 9 37 . c o m
U S : 64 6 . 8 3 9. 7 0 1 7
H K : 85 2 . 61 1 9 . 1 7 79
C N : 8 6 . 1 86 . 1 4 2 0 . 30 1 6
DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 1
HOLIDAY 2015
October 7, 2015
US Halloween 2015
Ghosts and Goblins Get to Roam Free
on a Scary Saturday Night
Halloween normally conjures up images of costumes, trick-­‐or-­‐
treating and candy. However, its roots lie in Christian and pagan holiday traditions. The name “Halloween” derives from All Hallows’ Eve (“hallow” is an archaic word for a saint), which was a Christianized pagan holiday that fell on October 31. Halloween was the last day that the spirits could roam free before All Saints’ Day, a Christian holiday falling on November 1. Halloween originally started as a day for remembering the dead, including saints, martyrs and faithful believers. It has evolved into our modern, consumer-­‐focused celebration of the macabre, including ghosts, goblins, monsters and, most importantly, candy. Please also see our report published by the UK FBIC team: A Saturday Halloween Promises a Bigger Event than Ever. Halloween, by the Numbers
According to the NRF’s annual Halloween Consumer Spending Survey, conducted by Prosper Insights & Analytics: Average spending per person is expected to hit $74.34, down 4% from $77.52 last year: 157 mil. Americans will celebrate Halloween this year, with spending totaling $6.9 bil. • Spending on costumes is expected to average $27.33 per person, for a total of $2.5 billion. Spending on adult costumes is expected to hit $1.2 billion and spending on children’s costumes, $950 million. Spending on pet costumes is forecasted to total $350 million. • 68 million Americans are expected to dress up for Halloween, and 20 million pet owners are expected to dress up their pets. • Spending on candy is expected to average $23.10, for a total of $2.1 billion; 93.7% of those surveyed plan to make a candy purchase. • Spending on decorations is expected to average $20.34 per person, totaling $1.9 billion; 66.5% of those surveyed plan to buy decorations. • Spending on greeting cards is expected to average $3.57 per person, for a total of $330 million; 33.5% of those surveyed plan to purchase cards. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 2
HOLIDAY 2015
October 7, 2015
As Figure 1 below shows, although estimated Halloween spending is expected to decline this year, it has totaled at least $6.9 billion every year since 2011. We see in Figure 2 below that average spending by the NRF survey respondents follows a similar pattern, holding above $70 per person since 2011. Figure 1. Estimated Total Spending on Halloween (USD Bil.) Figure 2. Average Planned Halloween Spending (USD) $8.0 $6.9 $5.8 $6.9 $79.8 $7.4 $72.3 $6.9 $64.8 $66.5 $66.3 $5.8 $77.5 $75.0 $74.3 $5.1 $56.3 $4.8 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2007 2008 2009 2010 2011 2012 2013 2014 2015E Source: NRF and Prosper Insights & Analytics Halloween 2015: A Spooky Saturday
This year, Halloween falls on a Saturday, which should boost sales of costumes, decorations and candy. Since many working parents will be off on Saturday and Sunday, they will have time to take their kids trick-­‐or-­‐treating, and will likely stay out later than they would if the holiday were to fall on a school night. Homeowners will have all day Saturday to shop for decorations and candy before the evening’s festivities begin. And there will be more Halloween parties Saturday night, since the next day is not a workday for many people. Spirit Halloween Rises from the Dead Every October
Specialty Halloween stores include Halloween Adventure, Halloween Express, Halloween City, Ricky’s and Spirit Halloween. According to research firm IBISWorld, there were 1,706 pop-­‐up Halloween stores in the US in 2013, and the number of such stores has grown steadily, at a rate of 8% annually, since 2005. In 2010, the growth rate rose to 15%, in part because several retailers had closed down, freeing up more retail space. Spirit Halloween is a chain of more than 1,150 pop-­‐up shops across the US, filled with more than 4,000 costumes and accessories in a variety of themes. Its staff grows from a few hundred to more than 20,000 starting in June, and the company generates its annual revenue in just three months. Spirit Halloween is privately held and does not disclose its revenues. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 3
HOLIDAY 2015
October 7, 2015
What Are People Buying This Year?
According to the NRF survey, 93.7% of respondents will purchase Halloween candy this year, making it by far the most popular Halloween product category. Consumers also plan to spend on decorations, costumes and greeting cards this year: Figure 3. Percentage of Respondents Planning to Spend, by Category 93.7% 66.5% 64.3% 33.5% Candy DecoraNons Costumes GreeNng Cards Source: NRF and Prosper Insights & Analytics Costumes
Princesses Are Most Popular, Followed by Minions, Star Wars and Frozen Characters According to the NRF survey, Americans will spend a total of $2.5 billion on store-­‐bought, homemade, and large and small costumes. This represents an average of $27.33 per costume. The largest category is adult costumes—which will account for $1.2 billion in spending—followed by children’s costumes, which will account for $950 million. More than 68 million Americans are expected to dress up themselves or pets this year. According to a separate NRF survey, the 2015 Top Costumes Survey, princess costumes are the most popular costumes for children for the 11th year in a row. The survey indicates that 3.2 million children are planning to dress up as a princess this year. Beloved characters from movies will be popular, too. The survey found that 2 million children plan to dress up as Frozen characters, 1.8 million as Star Wars characters and 1 million as Minions characters. In terms of adult costumes, the NRF survey found that witch costumes will be the most popular this year, also for the 11th year in a row: 4.3 million adult revelers are expected to dress as witches. Animal costumes ranked second in popularity among adults surveyed, followed by Batman characters, zombies and Star Wars characters. And this year, 774,000 adults will dress up as political characters. The top costumes for adults and children are listed below: DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 4
HOLIDAY 2015
October 7, 2015
Figure 4. Top Costumes for 2015 Halloween Top Adults’ Costumes
Top Children’s Costumes
1.
Witch 1.
Princess 2.
Animal 2.
Batman character 3.
Batman character 3.
Action/superhero 4.
Zombie 4.
Animal 5.
Star Wars character 5.
Frozen character 6.
Pirate 6.
Star Wars character 7.
Vampire 7.
Zombie 8.
Action/superhero 8.
Witch 9.
Doctor/nurse 9.
Pumpkin 10. Slasher movie character Political character (tie) Wench/tart/vixen (tie) 10. Minion 11. Minion Source: NRF and Prosper Insights & Analytics Pet Costumes
About 20 million pet owners are expected to dress up their pets this year, and they will spend a total of $350 million on pet costumes. Today.com published this list of Amazon’s top-­‐selling pet costumes this year: Despicable Me 2 Minion Pet Costume Rubies Costume Star Wars Collection Pet Costume Pink Purple Birthday Girl Paw Prints Clown Hat for Dog Costume Animal Planet PET20104 Triceratops Dog Costume Luau Shirt Pet Costume Sombrero Multicolored for Pets Rubies Costume Halloween Classics Collection Pet Costume California Costume Collections Animal Planet Lion Dog Costume, Large Animal Planet PET20109 Raptor Dog Costume Rubies Dapper Dog Costume Candy
According to the NRF survey, Americans will spend a total of $2.1 billion on candy this year, or $23.10 per person. The table below shows America’s most popular Halloween candies: Figure 5. Top Costumes for 2015 Halloween 1 Candy Brand Reese’s Annual Sales (USD Mil.) $510 Avg. Price (USD) $1.25 Supplier Hershey 2 M&M’s 501 1.15 Mars 3 Snickers 413 1.11 Mars 4 Hershey’s 308 1.05 Hershey 276 1.11 Hershey 5 KitKat Source: 24/7 Wall St. and IRI DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 5
HOLIDAY 2015
October 7, 2015
Decorations
Americans will spend a total of $1.9 billion on decorations this year, or an average of $20.34 per family, according to the NRF survey. Of the survey respondents, 44.8% of them said they plan to decorate their home or yard this year. Greeting Cards
According to the NRF survey, Americans will spend a total of $330 million on greeting cards this year, or $3.57 per person. Millennials Are More Likely to Participate in Halloween Activities 81% of consumers 18–34 years old are planning to celebrate Halloween this year, according to the NRF survey, and these millennials are more likely than the survey population to dress up in costume, throw or attend a party, and dress up their pets. Figure 6. Total Population vs. Millennials’ Celebrations 70% Total Millennials (18–34 Year-­‐Olds) 48% 44% 32% 20% 13% Dress in Costume Throw/AWend a Party Dress Pets in Costume Source: NRF and Prosper Insights & Analytics Millennials are also big users of the Internet and social media for costume ideas, as the graph below illustrates: Figure 7. How Will Millennials Look for Costume Ideas? TwiWer Current events YouTube Instagram Facebook Pop culture (celebribes, TV shows, Pinterest In a retail store or costume shop 9% 11% 15% 16% 23% 24% 25% 34% Online search 49% Source: NRF and Prosper Insights & Analytics In the above graph, we see that Pinterest is the top Internet site where millennials find inspiration for their Halloween costumes. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 6
HOLIDAY 2015
October 7, 2015
Do Halloween Sales Affect Holiday Sales?
Figure 8. Holiday Season 2015 Sales Forecasts Using the NRF’s figures from last year, Halloween sales of $7.4 Researcher Forecast AlixPartners 2.8%–3.4% Deloitte 3.5%–4.0% ShopperTrak 2.4% Source: AlixPartners/Deloitte/ShopperTrak billion represented just 1.2% of estimated total 2014 holiday sales of $617 billion. Given the many shopping events during the summer, such as Christmas in July and Amazon Prime Day, as well as the advent of Black Friday and Cyber Monday, one can easily argue that purchases that once were concentrated in the period leading up to Christmas now take place throughout much of the second half of the year. There are also other indications that many consumers now start their holiday shopping before Labor Day. For instance, on August 28, Walmart launched its layaway program for the holidays, and September 4 was “Force Friday,” when the retailer put Star Wars–
themed toys on sale. In addition, in September, Toys “R” Us lowered its minimum purchase to qualify for free shipping, and Kmart began airing a holiday commercial. Interestingly, although the NRF forecasted a 7% decline in total Halloween spending and a 4% decline in spending per person in 2015, many researchers are forecasting that holiday spending will be up 2.4%–4%. Is the Economy Helping?
Economic indicators seem to point to solid growth in holiday spending, as evidenced by: A decline in the unemployment rate in August to 5.1% (which is in the range of “full employment”). An upward revision to estimated second-­‐quarter US GDP growth, to 3.9%, showing that the economy grew faster than previously thought. In the NRF survey, only 17% of respondents said that the state of the US economy was impacting their Halloween plans, of which An increase in the University of Michigan’s Consumer Sentiment Index in the second half of September, to 87.2 from a mid-­‐month flash reading of 85.7, indicating that consumer confidence is recovering. 78.8% said they would spend less overall. 21.1% said they would buy less candy this year. 18.3% said they would make a costume rather than purchase one. 15.5% said they would use last year’s costume. Only 7.0% said that they would not buy candy this year. Despite the NRF’s projection of lower total and per-­‐person spending, Halloween 2015 seems nothing to be frightened of. Economic indicators point toward solid consumer spending, and less than one-­‐fifth of the NRF survey respondents said that the economy is hurting their spending plans. Moreover, forecasts for holiday shopping seem fairly positive at this point in the season, and millennials could add upside to spending: their purchasing power is increasing, and they enthusiastically celebrate Halloween. Finally, the holiday’s falling on a Saturday should make it convenient for greater numbers of people to shop and celebrate. Thus, we think we could see more treats than tricks this Halloween. DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 7
HOLIDAY 2015
October 7, 2015
Deborah Weinswig, CPA Executive Director—Head of Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected] Filippo Battaini [email protected] Marie Driscoll, CFA [email protected] John Harmon, CFA [email protected] Aragorn Ho [email protected] John Mercer [email protected] Shoshana Pollack [email protected] Kiril Popov [email protected] Jing Wang [email protected] Steven Winnick [email protected] HONG KONG: 10th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: 852 2300 2470 NEW YORK: th
1359 Broadway, 9 Floor New York, NY 10018 Tel: 646 839 7017 LONDON: 242-­‐246 Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0)20 7616 8988 FBICGROUP.COM DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 H K: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved. 8