US candy makers haunted by Halloween discounts as retailers scare up sales

US retailers are discounting some Hershey candy ahead of Halloween on Friday, the confectioner’s biggest holiday, after it hiked prices this summer due to cocoa inflation, according to third-party data.

The data, from investment bank Jeffries and Datasembly, showed Hershey was among food makers with the highest volume of products sold at a discount in the four weeks to Oct 4 compared to the prior year, and one mass retailer put more than half of the company’s seasonal candy on sale by early October.

US consumers are tightening spending in general due to an uncertain economy and government shutdown, and the rising cost of sweets has further prompted them to trim their candy budgets.

This is forcing confectioners and retailers to turn to discounts. Datasembly said Halloween discounts on all candy brands started earlier this year, were deeper and covered more items than in the past.

These include products from Mondelez, which makes Sour Patch Kids sweets, and Mars, home of M&M’s and Skittles, as well as Hershey, famous for Kisses and KitKat bars.

A Hershey spokesperson said that its seasonal candy - like pumpkin-shaped Reese’s - had significantly fewer discounts this year than last year.

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Hershey told retailers in July it would be implementing a double-digit price increase on average on its candy, and media reports said this would be about 10 per cent.

The spokesperson said Halloween candy was not included in that price hike, and the company has not significantly changed its spending on Halloween discounts.

Halloween candy shopping continues throughout October, and the data cited by Jeffries covered all Hershey products which include salty snacks.

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Overall, chocolate candy sales per unit were flat in the 12 weeks ended Oct 5, but prices rose 8 per cent, according to Circana, a market research firm.

Halloween is ‘make or break’

Hershey CEO Kirk Tanner said on Thursday that Halloween sales were “somewhat soft,” and he cited warmer weather and the timing of the holiday later in the week.

After peaking in late 2024, the price of cocoa - the key ingredient in chocolate - has moderated but remains historically high at about triple its pre-2022 level.

Retail candy prices still do not cover that historic rise so manufacturers are trying to pass on costs to consumers in an effort to restore profit margins.

Halloween and seasonal occasions like Easter and Valentine’s Day are especially important for confectioners because consumers budget for holiday treats.

“It’s make or break for our seasonal business,” said Chantal Butler, Mondelez president of North American confectionery.

Hershey is among 31 food makers tracked by investment bank Jeffries that had the biggest increase in volume of goods sold with a discount in the four weeks ended Oct 4, according to a Jeffries research note that cited Nielsen data.

Consumers love holiday treats but right now want they want “the best bang for their buck and are waiting for promotions. They won’t opt out of the holiday,” said Katie Thomas, the lead of the Kearney Consumer Institute.

Thomas added that consumers are increasingly aware of package sizes as companies shrink them to keep prices stable, a tactic known as “shrinkflation.”

“It’s not just the price, it’s the value,” she said. “Not only do I not want to pay US$30 (for a bag of candy), I don’t want to pay US$30 for really small pieces of candy.”

On Tuesday, Mondelez CEO Dirk Van de Put said some of its promotions in recent months have not been effective, adding consumers are “very concerned in general about the economy.” REUTERS