雅虎香港財經 Halloween spending expected to hit record high as sugar prices continue to rise
Consumer spending on candy, costumes, and decorations is projected to top $11 billion.
Getting a sugar rush is becoming more expensive, but that hasn't spooked enthusiastic Halloween fans.
In September, the cost of sugar and sugar substitutes is up 7.7% compared to a year ago, while candy and chewing gum jumped 7.5%. Prices of other sweets rose nearly 3% compared to last year, according to the Bureau of Labor Statistics' (BLS) latest Consumer Price Index (CPI).
On a yearly basis, the overall sugar and sweets category rose 6.5%, including a 0.3% jump compared to the month prior.
That's higher than overall food inflation, which increased 0.2% in September on a monthly basis and 3.7% year over year. The cost of groceries — food at home — jumped 0.1% and 2.4%, respectively.
But fret not, trick-or-treaters. Consumers are expected to spend $3.6 billion dollars on candy this year, a nearly 14% jump from last year's total of $3.1 billion. That figure is an all-time high, according to the National Retail Federation.
And nearly three-fourths of Americans, 73%, are expected to participate in Halloween festivities, higher than 69% last year.
Extreme weather is driving prices higher
Sugar futures (SB=F) are up 40% compared to a year ago.
"A lot of that increase that you're seeing is attributed to what the world's supply is going to look like," Andraia Torsiello, Mintec US sugar analyst, told Yahoo Finance over the phone. "India is actually a major exporter and they've had really poor weather conditions, so they're suffering from a really dry monsoon period."
It's partly the result of a climate pattern known as an El Niño over Asia, David Branch of Wells Fargo told Yahoo Finance over the phone: "It's impacting India, Thailand, and Australia too."
As a result, "India and Thailand did not get the monsoons they normally get," Branch said, which led to both governments basically shutting down exports.
Last year, the growth rate of US sugar exports also dropped by 2.38%, per the USDA.
"The reason why the prices are high and remain high is not only because of the inflation in the economy, but also just the supply not being as available as it was," Torsiello said.
Another factor behind the rise: the cost of cocoa. Cocoa futures (CC=F) are up 46%.
"There's a significant shortage of cocoa due to drought in those specific regions," Branch said, which spells bad news for candymakers. "I imagine that's a bigger chunk of the total cost of manufacturing than sugar."
Despite the noise, companies and consumers are moving forward, ready to celebrate.
A Hershey (HSY) spokesperson told Yahoo Finance there are no candy shortages related to the cost of sugar.
"[Movements] in sugar, as far as total manufacturing cost, are really very minimal to the manufacturer," Branch said, when compared to the cost to produce, ship, and distribute the candy.
On a call with investors following its Q2 results, Hershey CEO Michele Buck said the company expects a "very strong Halloween," with planned marketing and an approach of "leaning into Halloween."
It's also business as usual at Mars. "We met all our commitments to retailers, and even ended up being able to exceed the amount of candy we committed to in some cases," a spokesperson said.
Consumers are leaning in too. In Advantage Solution's recent survey around Halloween this year, 9 out of 10 respondents said they'll buy candy.
"Folks are still ready to celebrate ... we're still spinning out of a pandemic, people are spending more time celebrating, even elongating seasons," Andy Keenan, Advantage Solutions executive vice president, told Yahoo Finance over the phone. "There's a lot of nostalgia with Halloween."
Consumers will be looking for deals, though. Nine out of 10 shoppers will wait to make their purchase during the last two weeks of October.
"[Consumers] know prices will come down ... very few folks are buying on Oct. 12. They're highly inclined to start shopping on Oct. 27," Keenan added.
—
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
