by Doug Desjardins
If you’ve noticed more Halloween specialty stores popping up this year, it’s not your imagination. The combination of high retail vacancies and forecasts calling for better Halloween sales are prompting specialty retailers to expand.
In a trend that started in 2009, seasonal retailers like Spirit Halloween, Halloween Express and others are taking advantage of prime retail spots left empty by the demise of defunct retailers like Circuit City and Linen ‘N Things. 
According to research firm IBIS World, the number of pop-up Halloween retail shops is up 15% this year--15,000 compared to 13,000 in 2009. IBIS is projecting costume sales to increase 4.2 percent this year, with specialty retailers grabbing 55% of the costume market compared to just 17 percent for mass merchants.
The rapid growth of pop-up retailers is an outgrowth of what is still a buyer’s market in commercial real estate. Research firm REIS estimates the vacancy rate in shopping malls is currently 8.8% -down from 9% earlier this year – while strip malls are holding steady at 10.9 percent. The average rent per square foot is $38.72 in shopping malls and just $19.07 in strip malls according to REIS, bargain prices compared to rents in pre-recession days.
And with many long-term leases due to expire soon, mall owners could see another jump in vacancy rates next year. “With the tepid economy and sluggish job growth, we expect to see vacancies continue to inch upward in 2011,” said Victor Canalog, director of research for REIS.
Doug Olson, a retail estate specialist with LandQwest Commercial, said shopping centers are leasing space at rates 35 to 40 percent less than five years ago, when the economy was near its peak, and leasing space for several months instead of several years.
“Under normal market conditions, the prime retail centers would have a minimum lease term of three to five years,” said Olsen.
Even smaller pop-up retailers, anticipating a better Halloween season, are expanding to take advantage. Ricky’s, a retailer that operates small, seasonal Halloween stores in New York, has opened nearly 50 stores this year, about twice as many as 2009.
The National Retail Federation (NRF) projects total Halloween sales to hit $5.8 billion this year, an increase of about 16% over a disappointing 2009 season. The NRF expects the average consumer to spend $66.28 on costumes, candy and decorations this year compared to just $56.31 in 2009. Spending is projected to be on par with Halloween 2008, when consumers spent an average of $66.54 on Halloween fare.
“This year, people are expected to embrace Halloween with even more enthusiasm and will have an entire weekend to celebrate, since the holiday falls on a Sunday,” said NRF president and CEO Matthew Shay.
Resources
Retailers Scaring up more Halloween Sales
Halloween Pop Up Stores Jump 15%
COUPON TIME
We've got one of those Halloween stores right around the corner--just a quarter mile away, as the bat flies. But you can also shop for great online Halloween deals!
