Entrepreneurs: The Cost Of A Good Scare

Author: Melanie Lindner, Lisa LaMotta

Your blood-splattered 401(k) sends more chills than anything a ghoulish costume or a haunted house can muster.

Yet for all the economic pain, Americans will still shell out an estimated $5.8 billion on All Saint's Day this year, up 43% since 2005 (annualized growth: 21%), according to the National Retail Federation's (NRF) 2008 Halloween Consumer Intentions and Actions Survey, conducted by market research company BIGresearch.

Slides Show: What Americans Spend On Halloween



















Now, that's just a fraction of the $17 billion lovebirds spent on Valentine's Day--flowers and jewels cost more than candy and costumes--but still about equal to the gross domestic product of Nicaragua (and that doesn't include all the alcohol consumed at scores of crazy costume parties).

At the very least, Halloween is a relatively cheap distraction from the harrowing housing market. "The average person planning to celebrate is only going to spend about $66, which, despite recent events, is still pocket money for most Americans," says Pam Goodfellow, senior analyst with BIGresearch.

Nearly 65% of the 8,167 people surveyed by the NRF plan to celebrate Halloween in some way--including dressing up, going to a party, handing out candy, carving pumpkins, visiting a haunted house, trick-or-treating and decorating. According to Hallmark, Halloween is the third largest party day, behind New Year's Day and Super Bowl Sunday.

About 96% will buy candy, spending an average of $21 per person. Not that it all gets eaten: Much to kids' chagrin, most parents swipe candy from their kids' trick-or-treat bags. The good news for all those dispossessed princesses and Incredible Hulks: According to a recent survey from the National Confectioners Association, sugar-free product releases jumped 51% from 2006 to 2007. And in the first eight months of this year, 159 new "functional" candies--those containing nutrients like calcium, protein and fiber--hit the market, compared to 154 in all of 2007.

The percentage of people planning to decorate their homes and yards will jump to 50% this year, to $1.6 billion, up from 48% in 2007, says the NRF. Average amount spent per person: about $27.

Pumpkins are always a smash. Nearly 45% of people surveyed said they intend to carve pumpkins for Halloween this year. In 2007, U.S. farmers harvested 43,200 pumpkins, according to the U.S. Department of Agriculture; total weight: just over 1.1 billion pounds.

Even pets are getting Halloween fever. A recent PetSmart (nasdaq: PETM - news - people ) survey showed that some 16 million pets will don costumes in 2008. Familiar numbers like pumpkins and devils will be joined this year by Disney (nyse: DIS - news - people ) characters Snow White, Peter Pan and Tinker Bell.

For all the revelry, Haunted houses may suffer a frightful sales-hit in the troubled economy. "While a few bags of candy and a costume might be relatively cheap, a haunted house visit might cost $20 per person," says Goodfellow.

Grownups can take the screams up a notch by braving bloodcurdling roller coasters at the annual Fright Fest, hosted by Six Flags (nyse: SIX - news - people ) theme parks. Impatient riders can score front-of-the-line passes by munching on creepy crawlers like roaches, worms, caterpillars and night crawlers.