American children may need to take extra pleasure in dishing out the pain of a Halloween trick this year. Cash-strapped residents will likely be short on candy to bribe them away from their doorstep.
A new survey by Advantage Solutions reveals inflation is taking a blood-sucking bite out of nearly half the nation’s Halloween budgets. After polling 1,000 U.S. adults who act as their household’s primary shopper, Advantage reported four in 10 Halloween candy buyers say inflation will impact their plans to buy the treats this year.
Inflation chills may be taming the urge to splurge on spooky spending – but candy still reigns as the must-have Halloween product. Nearly nine in 10 respondents said they will buy candy, while only about six in 10 will purchase decorations and costumes, while a mere three in 10 will buy foods other than candy.
Consumption of chocolate, in particular, could reach sinful proportions. Of respondents who plan to buy confectionary, a whopping 90% will buy chocolate candy for the festivity.
“Nine in 10 grocery shoppers will buy Halloween candy and nearly three-fourths of them will walk into stores during the last two weeks of October looking for their favorite treats at a perceived value,” says Andy Keenan, executive vice president of retail services at Advantage Solutions. “Keeping these products on the shelf and in displays couldn’t be more critical for both candy brands and retailers, especially during the run-up to Halloween when shoppers are most active.”
The lead-up to America’s scariest night could be a fortuitous time for investors wanting seasonal exposure to the candy economy.
Publicly-listed companies that have profited most from Halloween in the past include The Hershey Company (HSY), Mondelez International (MDLZ), and Tootsie Roll Industries (TR).
Hershey, famous for its eponymous chocolate bars, reached a historical price high of $276.35 in May this year and is currently trading at around $195. The candy company has a Price-to-Earnings ratio of 22.52. It has a 1-year Target Estimate of $254.20.
Illinois-based Mondelez, which owns the Cadbury and Milka brands and Oreo cookies, is one of the largest candy conglomerates in the world. Mondelez recently sold its developed-market gum business to Perfetti Van Melle as part of an effort to double down on its core categories – chocolate, biscuits, and baked snacks. The company is currently swapping hands around the $64 mark and has a 1-year Target Estimate of $82.67.
Tootsie Roll Industries is the manufacturer of the iconic chocolate rolls, as well as Caramel Apple Pops, Dots, Andes Chocolates, and other confectionery. The stock surged and remained above the $40 mark for much of the final quarter of 2022 and first quarter of 2023. However, it has slipped substantially in recent quarters, and is currently trading at around $30. Tootsie has a Price-to-Earnings ratio of 27.04 and a 1-year Target Estimate of $254.20.