Investing
Zoe Team
3 min read
Inflation is driving up the price of candy by 13%, outpacing the broader food CPI of 11.2%.
Supply chain issues, droughts, and production strategy shifts have led to reduced on-shelf availability for some brands.
Consumers are responding to high inflation by starting holiday shopping earlier to spread out budgeted expenses.
No, trick-or-treating is not canceled, but households will face higher-than-anticipated candy expenses.
Prices have risen due to drought-battered sugar crops, supply chain delays caused by the war in Ukraine, and pandemic-related production costs.
Retailers are offering early promotions to manage demand; shoppers are increasingly starting holiday gift purchases in October to mitigate inflationary pressures.
Inflation has remained high this year at approximately 8.2%, and we have seen an increase in the costs of commodities. According to the US Bureau of Labor Statistics, the price of candy is 13% higher than it was just one year ago.
After a parade of costumes, everyone waits for the sun to set and the doorbells to start ringing… time to trick-or-treat! Whether you take your children or grandchildren to the house down the street that gives out full-sized chocolate bars or to the more traditional candy corn givers, you’re likely expecting the kids to bring home enough Halloween candy for the rest of the year. All sugar highs are welcome during this Halloween… or are they?
Inflation has remained high this year at approximately 8.2%, with costs increasing across a range of commodities. Candy prices however, have risen at an even ghastlier rate. According to the US Bureau of Labor Statistics, the price of candy is 13% higher than it was one year ago. This is even higher than the CPI for food which is at 11.2%.
Sugar is more expensive for a number of reasons. Sugar cane crops have been battered by droughts, delays in the supply chain process of chocolate resulting from the war in Ukraine, and the continued effects of the pandemic have increased costs for suppliers and manufacturers.
While candy is produced year-round, companies see spikes in demand during sweet tooth holidays such as Halloween. Companies must therefore prioritize whether to meet the demand for Halloween and risk profit loss year-round or not meet the demand for Halloween items and use their resources for regular year-round products. For example, Hersheys’ CEO Michele Buck claimed their current strategy is centered around “everyday on-shelf availability.” So if you haven’t seen the purple and orange-wrapped Hershey packs lately, you know why.
Whether you are buying Switzerland’s DeLafée chocolates to celebrate the sugar-high holiday with your partner or distributing Hershey bars during trick-or-treating, prices are up.
That headline was spooky. Trick or treating is not canceled. No one would think of stealing children’s happiness that way, but households will have greater candy expenses than anticipated. To be precise, S&P Global has announced the expected household spending on Halloween candy is approximately $3.2 billion.
According to Deloitte, the rise in candy prices might also indicate slower holiday shopping this year. Moreover, if you have seen sales signs that have made you double-check your calendar to confirm it’s still October, you are witnessing retailer strategies. Many companies are responding to demand and launching promotions. Doing so allows them to give consumers a chance to distribute their budgeted expenses. According to the National Retail Federation (NRF), the latest consumer survey expressed that 44% of holiday shoppers prefer buying holiday gifts earlier during October as they fear the effects of inflation.
Inflation might have made Halloween’s weight lean more toward the tricks than the treats, but at least now you know holiday shopping can and should be spread out throughout the upcoming two months. Avoid the spookiness of this season from extending and think about the presents you want to buy. Holiday promotions may be waiting for you!
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