This was supposed to be the biggest Halloween of Lorenzo Caltagirone’s career.
For the first time in 95 years, it would fall on both a full moon and a Saturday — an equation that normally would mean big profits for his Virginia costume shop. Instead, sales are down 80% and he is running low on cash.
“I’ve never been this worried before,” said Caltagirone, who opened his Virginia store in 2007, just before the last recession and says his store is barely hanging on. “After all these years of business, this Halloween could actually be the one that puts me out.”
Costume shops, party stores and seasonal pop-ups that rely on Halloween for the bulk of their profits say they’re bracing for a steep drop off in sales that could tip them into insolvency. Halloween spending is expected to fall 8%, to $8.05 billion, with costume sales accounting for much of the decline, according to the National Retail Federation.
With grown-up celebrations — costume parties, block parties and holiday bar crawls — largely on hold this year because of the pandemic, early sales have been largely confined to lawn decorations and children’s costumes. Shop owners say that shift is impacting their bottom lines: Adult costumes and accessories, which can easily add up to more than $100, typically bring in the majority of their seasonal revenue and profits.
“Halloween is a make-or-break time for smaller seasonal retailers,” said Diane Swonk, chief economist at Grant Thornton. “They wait all year for October. Now the pandemic is going to put many of them back an entire year, if not more.”
Kharolina Lampe, who runs a costume shop in Honolulu, typically rents out hundreds of elaborate outfits for Halloween. But this year she has yet to receive a single order.
The local economy, she said, has been devastated by a lack of tourism. Hawaii’s unemployment rate of 12.5% is one of the worst in the nation, and Lampe says it could be years before she and other small-business owners recover. She recently closed her storefront and now operates the business from home.
“The economy has been so bad,” said Lampe, who started Kharolina Costumes in 1979. “Just about every other costume shop in Honolulu went out of business a while back — and I probably should have too, to be honest.”
Public officials have cautioned Americans against traditional Halloween activities. The U.S. Centers for Disease Control is advising families to avoid trick-or-treating, hay rides and fall festivals this year, while Los Angeles County has banned Halloween parties and haunted houses.
Retailers of all sizes are having to adapt to changing seasonal demands. Party City is opening just 25 Halloween pop-ups this year, a 91% drop from the 275 it ran last year. Spirit Halloween, meanwhile, is offering delivery through Instacart and is selling themed face-masks and bags on a stick so trick-or-treaters can collect candy from an arm’s length away.
Small businesses, meanwhile, say they’re at a particular disadvantage. Big-box retailers and online sellers have been cutting into their revenue for years, but it’s become more difficult than ever to win back customers at a time when many are still worried about shopping in stores. More than 100,000 small businesses have permanently closed during the pandemic, while Walmart, Target and Amazon continue to post record sales growth. (Amazon’s founder, Jeff Bezos, owns The Washington Post.)
In Maplewood, Minn., Costumes Plus has rearranged its store to allow for social-distancing and other safety precautions. All of the shop’s mannequins now wear masks, and the season’s most topical products, including hazmat suits and plague doctor costumes, have been moved to the front of the store.
But sales are about half of what they usually are.
“It’s definitely a lot slower than usual,” said manager Lucia Berocay. “The two weeks leading up to Halloween are usually shoulder-to-shoulder packed in here, but that’s just not going to happen this year. The demand just isn’t there, and even if it was, we have to have strict occupancy limits.”
While some items — like spooky home decorations, children’s costumes and Halloween-themed face masks — remain in high demand, store owners and economists say they expect an overall drop in consume spending as millions of families are dealing with job losses and sustained financial insecurity.
“Obviously nobody knows what the world will be like in a month from now, so everything is up in the air,” said Katrijn Gielens, a professor at the University of North Carolina’s Kenan-Flagler Business School. “People still want to celebrate Halloween but they’re finding new ways to do it. Instead of buying candy for the whole neighborhood, maybe they’re just buying it for their family — which will have a spillover effect on businesses.”
Caltagirone had just finalized orders for thousands of costumes and signed a three-year lease on his Arlington store when the pandemic took hold in March. He closed shop and canceled as many orders as he could.
He reopened in June with reduced hours and two employees instead of eight. Business fell sharply, as the pandemic dampened demand for just about everything Caltagirone sells, including greeting cards, balloons and tableware. He used two government loans – one from the Paycheck Protection Program and an Economic Injury Disaster Loan — to help make ends meet.
But that money is mostly gone now. Shoppers are beginning to trickle back, mainly to buy inflatable decorations and children’s costumes. Not selling as well are the aisles of adult costumes, inspired by “Mulan,” “Tiger King” and the presidential election that he ordered back in February. If he doesn’t make at least 50% of the sales he did last October, Caltagirone says he will likely have to close.
“Halloween carries us through the rest of the year,” he said. “You can go a quarter, maybe two, without sales, but to go until next year — well, that’s just not doable.”