Persistent inflation in the United States is cooling the candy and chocolate market ahead of Halloween. Analysts say consumers are cutting back even on Halloween treats as spending on essentials such as fuel, housing and food climbs.
Monthly sales of snack items including candy, gummies and chocolate in the U.S. fell 6.7% from a year earlier, according to market research firm NielsenIQ data compiled as of the 17th and reported by The Associated Press on the 24th. Candy sales as of mid-September were down 11.7% from the same period last year.
Demand for candy and chocolate normally rises in late October ahead of Halloween, when children go door to door collecting sweets and related product sales climb. This year, however, sales have been weak even ahead of the peak season, dimming hopes for a Halloween boost.
Chris Costagli, a vice president at NielsenIQ, pointed to the recent rise in gasoline prices and the resulting strain on household budgets as a main cause. He told the AP that consumers are already spending heavily on fuel, housing, clothing and food, and said the issue is not that Halloween candy costs more than last year but that households have spent so much elsewhere that they cannot afford candy this year.
U.S. gasoline prices are indeed adding to the burden on households. The average price of regular gasoline in the U.S. stood at $4.29 a gallon as of the 23rd, up about 40% from a year earlier.
Raw material costs are also pushing chocolate prices higher. Bad weather in West Africa, a main cocoa-growing region, combined with fertilizer supply disruptions stemming from the war in Iran, has driven up prices for cocoa, the main ingredient in chocolate. Rising living costs and higher input prices together have weighed on consumer sentiment.
Candy purchases could still pick up as Halloween approaches, as consumers coping with higher living costs increasingly buy what they need closer to the time they use it.
Sally Lyons Wyatt, global executive vice president at market research firm Circana, said overall candy sales look weak but that Halloween spending has not collapsed entirely. She said she expects candy sales to be soft overall but does not think Halloween is a complete write-off.
The U.S. National Confectioners Association also said consumer interest remains strong. In a statement on the 23rd, the association said the Halloween peak season is only just beginning and that consumer enthusiasm remains extremely strong.