As the U.S. government shutdown continues over failed budget talks, it’s also intensifying the costs of already pricey everyday goods. And as for Halloween, the effects on seasonal products are causing quite a scare.
Many of the issues begin at ports and borders. Forbes reports that the layoff of thousands of Customs and Border Protection support staff is severely slowing documentation and inspections. This bottleneck has an immediate impact on transit times and is forcing many retailers to risk stockouts or resort to expensive, less sustainable shipping methods.
According to a recent consumer survey by the National Retail Foundation, Halloween spending is expected to reach a record $13.1 billion this year, a 13% increase from last year. That makes sense, Forbes reasons, because 90% of Halloween-themed costumes and decorations have “at least one component made overseas, most commonly in China.” As a result, “retailers must navigate complex supply chains and potential delays to meet the sudden surge in demand for trending items.” Compounded with increased costs from tariffs, it’s no wonder that prices for Halloween items are frightening.
Meanwhile, candy purchases are predicted to hit $3.9 billion, with a 100-piece bag of assorted Halloween treats costing about $16.39 — up $7.20 over the past five years. Inclement weather in West Africa is a major cause of the drastic increase. The nation produces 70% of the world’s cocoa and has been experiencing acute drought and tree disease. Worse yet, most of the chocolate sold for Halloween was produced when cocoa was trading at a monstrous $10,000 per metric ton, versus the standard $2,000 to $3,000.
Candy producers are responding by reformulating existing recipes and adding more non-chocolate items to their confections. One Hershey's strategy is its new Jumbo Reese’s Cup, which maximizes the use of cheaper peanut butter to reduce the chocolate-to-filling ratio. Similarly, Nestlé has launched a KitKat called Ghost Toast with a green marshmallow coating instead of the traditional milk chocolate. And Mondelez International's U.S. Confectionery President Chantal Butler told the Los Angeles Times that gummy candies are now the priority in the American market. Limited-time offerings, such as Halloween-themed Sour Patch Kids, "contribute significantly to the demand we see this time of year," she added.
When supply chains go bump in the night
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