Parents can breathe a fun-sized sigh of relief this Halloween as candy prices are expected to rise just 0.9% this year. The break comes two years after red-hot sales hit a sour patch, falling in real terms, and as creeping input costs continue to challenge candy makers.

In our forecast, growth of current dollar spending on treats is expected to fall short of its pre-pandemic average — and for a third year in a row. While fewer price increases slow the growth of nominal sales, kids (and economists) care more about quantities, and we look for growth of real sales to outpace its pre-pandemic average. A return to real growth is a welcome sight after two years of declining sales.

The short and sweet of it is, we look for current dollar spending on Halloween candy to grow 3.5% in 2024, to a record $4.1 billion — nearly double what consumers spent on candy a decade ago. This comes out to around $30.89 per household, and while growth is expected to fall just short of its prepandemic average, slower inflation can be expected to take a smaller bite out of real sales this year. Real purchases of Halloween candy (i.e., volumes), are expected to rebound in 2024, growing 2.4% after falling 10.0% and 3.7%, respectively, over the last two years. In our forecast, real spending on Halloween candy rises to $23.11 per household, about what a family spent on candy in 2019 — still below the sugar rush seen in 2021.

Inside the wrapper

After rising 6% last year and a whopping 14% the year before, prices are up just 0.9% this year, however, the cost of raw inputs — sugar and cocoa — has continued to rise by double digits, forcing candy makers to focus more on non-chocolate candies.

Labor costs continue to rise. Average hourly earnings (AHE) for sugar and confectionery product manufacturing employees are up 3.8% y/y. While that represents a slowdown from the 13.5% rise seen in 2023, labor costs have more than recovered from an 8.1% decline in 2022 when rattled supply chains disrupted manufacturing.

Higher prices mean confectionary makers continue to face shrinking margins, and combined with slowing sales, explain two trends consumers can expect to see when shopping this year. First, a shift towards offering more non-chocolate candies, and second, the appearance of seasonal sweets on shelves even earlier this year. Both trends come as candy makers and retailers try to capitalize on continued demand for celebrating and shoppers' constant hunt for a good deal. The National Retail Federation expects a record number of people to engage in the festivities this year and reports that almost half of those surveyed began shopping before October!

Inflation broadly has cooled, wages have continued rising, and interest rates are starting to fall. Two years past a spike in prices, demand has held steady and the worst of inflation's fever appears behind us. If our luck holds, we will find ourselves still on track for a soft landing this time next year.

In short, while there may be fewer chocolate bars being handed out, there will be no shortage of other sweets available to appease the mini masses this year. Our only advice? Don't forget your pillowcase.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.