The data: The average consumer expects to spend $115.14 on Halloween this year, essentially flat with last year’s $114.45, per the National Retail Federation’s annual consumer survey conducted by Prosper Insights & Analytics.

Overall Halloween spending is expected to rise 3.0% to $13.5 billion. But that growth trails the 3.4% inflation rate and represents a sharp slowdown from last year’s 12.9% increase, suggesting higher prices are contributing to those gains.

Zooming in: Value is front of mind for consumers, and it is causing them to adjust when and how they shop to stretch their budgets. Among early Halloween shoppers—those who started in September or earlier—23% said they shopped early to spread out spending, while 21% were drawn in by prices or promotions that were too good to pass up.

That focus on affordability is also shaping where consumers shop, with discount stores ranking as the top destination for Halloween purchases (39%), ahead of specialty Halloween/costume stores (32%) and online retailers (27%).

Consumers are also prepared to adjust their spending if prices are higher than expected. Some 31% plan to comparison shop, 26% will seek out coupons or sales, and 34% will look for products they can reuse in future years or repurpose for other occasions.

Why it matters: Last year we argued that the surge in Halloween spending reflected consumers’ desire to use events like Halloween as an escape from economic gloom. This year’s slower growth suggests that consumers’ ability to splurge on discretionary items like decorations and costumes could be hitting its limit given the rising price of gas—which is $1.33 more per gallon than a year ago, a 42% YoY increase—and other essentials.

Recommendations for retailers: Consumers aren’t giving up on Halloween—the share planning to celebrate actually ticked up to 74% from 73% last year—but retailers need to find ways to make the spending easier to justify.

• Lean into affordable indulgences like candy and lower-priced decorations that let consumers participate without a major outlay.
• Make value obvious through discounts, targeted promotions, and bundles that give shoppers more for their money.
• Position big-ticket decorations like Home Depot’s 12-foot Skelly or Sam’s Club’s 11-foot Animated Towering Reaper as investments consumers can reuse year after year.

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