The Scary Truth Behind Seasonal Stores
As a child, Halloween is as simple as dressing up as your favourite cartoon character, sorting your candy at the end of the evening and begging your parents to have one more piece. However, as this spooky season comes to a close, it is enlightening to analyze the capitalist powerhouses that make these childhood memories a possibility, for better or for worse. Halloween is adored across North America, though the most frightening elements of the holiday lie within the business strategy of key Halloween retailers and their environmental practices.
Industry Overview
It is no secret that the pandemic drastically impacted the Halloween market, like most other industries. However, this year, Halloween-related spending was expected to surpass pre-pandemic levels at an all-time high and even reach $12.2 billion in the United States. Of this large number, it is anticipated that costume expenditure alone would reach $4 billion in the United States. Halloween spending was not always this significant, though large retail chains like Party City and Spirit Halloween have made accessing inexpensive costumes, decorations, and accessories more accessible for the average North American consumer who celebrates the holiday, which is approximately 70% of the population. While this seasonal event engages mass amounts of consumers and triggers high spending continent-wide, winter holidays and the back to school season tend to engage higher levels of consumerism.
Spirit Halloween; this holiday’s retail giant
Reminiscing on your costume from this year, it is likely that you acquired a few components from your local Spirit Halloween. The seasonal retail chain was founded by Joe Marver in 1983, starting with one location in California and enduring mass expansion to the current 1,450 North American Locations. These locations are open from late summer to early November and occupy vacant retail spaces in strip and traditional malls. The company also operates an e-commerce site allowing consumers to make costume-related purchases all year long. While the company's main competitors are Party City and Halloween Express, seasonal pop-up locations like Spirit Halloween compose 35% of the total Halloween market. Spirit Halloween does not disclose annual financials; it is estimated that the retailer incurred $400 million in sales in 2015, which was 16% of the total Halloween costume spend for that year in the United States. Since this figure was estimated, it is reasonable to assume that their market share has drastically increased due to the mass expansion each year and increasing brand awareness amongst North American consumers.
Business Strategy
Since Spirit Halloween is a seasonal location, the company operates on a nuanced business model which heavily relies on a favourable retail real estate landscape. To begin the Halloween season, Spirit Halloween begins sourcing costumes in January based on the most notable popular culture trends. However, to ensure they satisfy demand, costumes relating to recent popular culture trends are produced closer to Halloween, which immensely decreases the environmental sustainability in the already questionable supply chain. On the other side of operations, the real estate team begins scouting vacant retail spaces to lease for a few months of the year. The teams often seek out large spaces close to other department stores like Best Buy and Walmart, to ensure foot traffic and brand exposure are maximized. An obvious contingency for the success of the retail chain is dependent on the availability of commercial real estate, which with the help of the ongoing retail apocalypse there is sufficient supply. The term retail apocalypse sheds light on the mass closure of brick-and-mortar retail locations across North America due to both shifting consumer behaviours towards e-commerce and recent bankruptcies. It is expected that within the next five years, we will see 80,000 brick and mortar stores close, in addition to massive bankruptcies like Toys R Us and Sears. The declining state of the big-box retailer in North America has been essential for the growth of Spirit Halloween, permitting the company to incur record profits and capture significant market share. The ease of leasing retail space, coupled with the high volume of sales in a short span of time, paints Spirit Halloween to be an incredible threat to full-year stores like Party City, and the Halloween sales expected by other big box stores like Walmart.
Environmental Implications
While the opportunity for additional growth of Spirit Halloween excites Joe Marver, it creates a dangerous narrative for the fast fashion sector. Most consumers purchase Halloween costumes and decorations to serve one night and then be disposed of. This practice is exactly what sustainability experts are urging consumers to avoid. In addition to the inherent wasteful nature of Halloween, the products being sold themselves are concerning. Cheap costumes are made using non-biodegradable materials and harmful chemicals which contribute to landfill waste. Additionally, the water usage in the process of manufacturing inexpensive textiles is incredibly wasteful and could be avoided with a decrease in consumerism.