Higher candy prices weigh on Halloween sales despite record holiday spending

Americans are expected to spend a record $13.5 billion on Halloween this year, up from $13.1 billion last year, but higher prices and pressure on household budgets are curbing candy purchases.

Candy and chewing-gum prices rose 7.7% in September from a year earlier, while Wells Fargo’s Agri-Food Institute estimated chocolate prices would be about 8% higher than last Halloween. Poor growing conditions in West Africa disrupted cocoa supplies, while adverse weather also tightened sugar supplies. Although cocoa prices have retreated from historic highs, relief has not reached store shelves because much of this season’s chocolate was made with cocoa purchased six to 12 months earlier.

Halloween candy sales were down 6.7% in the period ending Oct. 17 compared with a year earlier, according to NielsenIQ data cited by CNBC and Fortune. Hershey said category sales at convenience stores fell 5% in September and remained weak in October as consumers contended with inflation, interest rates and higher gasoline prices. Sales outside convenience stores grew 3.7% in the third quarter, suggesting shoppers shifted toward mass retailers, online sellers and warehouse clubs.

Hershey’s third-quarter net sales rose 3% to about $3.28 billion, driven by higher prices even as sales volume declined. The company narrowed its full-year organic sales-growth forecast to about 3%. Separately, the National Retail Federation expects Halloween candy spending to reach $4.1 billion, with 96% of celebrants planning to buy it.