It’s usually a bad idea to look at Halloween sales as an indicator for holiday highs or lows in consumer spending – But this year is different.
This week, we explore what halloween signals for the remainder of the year and take a look at the surprising data behind retail shrink in 2023.
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Halloween Sales tee up Holiday spending
It’s usually a bad idea to look at Halloween sales as an indicator for holiday highs or lows in consumer spending. Halloween has a different buyer profile than holiday – it tends to look more like back to school spending than holiday gifting, with a younger profile, a smaller pool of interested people, and a much smaller overall budget.
But this year is different. In particular, the student loan repayments that resumed in October have the potential to be the final straw that breaks consumers’ backs.
As we mentioned last week, spending this holiday season is expected to rebound to – and even surpass – pre-pandemic levels this year for the first time. Surprisingly, 66% of shoppers say they have purchased an item online in the last 12 months that they previously only ever bought in-store during the holiday season.
Although using Halloween spending to gain any confidence in the holiday season outcome may seem like grasping at straws, its always good to stay on the side of optimism.
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Retail Shrink by the numbers
Retail theft has caught the attention of the masses in recent years, from startling smash-and-grab videos during the depths of the Covid pandemic to corporate earnings calls where retailers like Target and Foot Locker are discussing losses from organized retail crime more than they ever have.
Despite the increased media attention, the effect of theft on retailers’ bottom lines is about the same as it has been for years, according to the latest data released by NRF.
Retail shrink climbed in absolute dollars, but when reported as a percentage of sales as is commonly done, average annual shrink increased to 1.57%, up from 1.44% in 2021. The share is largely in line with past years. Average annual shrink was 1.62% of sales before the pandemic in 2019, though it was as low as 1.33% in 2017, according to previous surveys.
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