Picture from http://www.pleasantondowntown.net
In the spirit of the Halloween season, I recently stumbled upon Kyle Chayka’s blog “The Halloween Industrial Complex” in which he describes the amount of money Americans spend on all things “Halloween”. The National Retail Federation (NRF) reports a total of $2.79 billion spent on costumes alone, not to mention $2.23 billion in candy, and even more in decorations. One reason why such a large amount of money is spent on this seasonal celebration is due to the fact that Halloween appeals to people of all ages. At the early toddler stage, children enjoy dressing up as their favourite TV characters, teenagers get a kick out of being something they’re not for a night, and adults buy costumes to entertain their children. Even pets these days are being given a Halloween makeover. These days, people are increasingly choosing to buy costumes rather than make them themselves due to the lack of time, especially when Halloween falls on a weekday. Thus, anyone in the costume business is bound to have a large customer segment, especially since Halloween has a large focus on the costume aspect, unlike other seasonal celebrations. Near the end of October, stores begin to stock up on costumes of all sizes, candy, fake blood and spider webs. However, the inventory piles up, and anything left over after the 31st ends up sitting in the back until next year. This can be disadvantageous due to the space it takes up, and the risk of it going out of fashion. Thus, Halloween is a celebration that can be extraordinarily profitable for store owners, however, care must be taken to estimate demand and manage inventory levels accordingly.