U.S. retailers are ramping up Halloween promotions on Hershey products, rolling out deeper discounts to keep candy sales strong despite higher prices driven by cocoa inflation and new tariffs.
The markdowns arrive at a time when chocolate candy sales volumes have stagnated, even as prices jumped about 8% in the 12 weeks ending Oct. 5, according to data from market research firm Circana.
With higher prices causing shoppers to scale back on candy purchases, retailers and confectionery brands including Hershey’s rival Mondelez, maker of Sour Patch Kids is leaning on deeper discounts to keep shelves moving and attract cost-conscious Halloween buyers.
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Although cocoa prices have shown signs of stabilizing in recent months, many candy makers are continuing to pass along higher production and supply chain costs to consumers. From a retailer’s business perspective, this presents both a challenge and an opportunity.
Seasonal events like Halloween, Easter, and Valentine’s Day are critical sales periods when shoppers expect to spend on indulgences and festive treats. Retailers rely heavily on these holidays to drive traffic, clear seasonal inventory, and boost margins through themed promotions. However, when manufacturers such as Hershey, Mondelez, and Mars raise prices to offset past cost pressures, retailers must carefully balance pricing strategies offering enough discounts to maintain volume while protecting their own profit margins.
In essence, the candy aisle becomes a test of pricing power and consumer loyalty. Retailers who manage to absorb part of the cost or creatively bundle offers stand a better chance of sustaining sales momentum during these key holiday windows.
“It’s make or break for our seasonal business,” said Chantal Butler, president of North American confectionery.
According to a Jefferies research note citing Nielsen data, Hershey which is scheduled to report its quarterly results on Thursday, ranked among 31 major food manufacturers that saw the sharpest rise in the share of products sold at discounted prices during the four weeks ending Oct. 4.
“People love to spend in the holidays,” said Katie Thomas, the lead of the Kearney Consumer Institute, an internal think tank at the consulting firm. “But right now, they’ll want the best bang for their buck and are waiting for promotions. They won’t opt out of the holiday.”
From a retail standpoint, the Halloween season is exposing shifting shopper behavior. Thomas noted that concerns over a potential U.S. government shutdown have made consumers more cautious, paying closer attention to product sizes and value for money. Retailers are noticing pushback against “shrinkflation,” as brands quietly reduce package sizes to avoid visible price hikes, a move that risks dampening holiday enthusiasm and forcing stores to offer steeper promotions to keep candy sales strong.
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“It’s not just the price, it’s the value,” she said. “Not only do I not want to pay $30 (for a bag of candy), I don’t want to pay $30 for really small pieces of candy,” as Reuters.
According to data analytics firm Datasembly, retailers began rolling out Halloween candy promotions earlier than usual this year, with broader and steeper markdowns across store shelves. By early October, more than half of Hershey’s candy lineup was already discounted at a major national retailer, the firm noted, though it did not specify which one.
On Tuesday, Mondelez CEO Dirk Van de Put cautioned that several of the recent promotions run by the Oreo maker have failed to generate the expected results, noting that consumers are “very concerned in general about the economy.”