These days, Halloween's a big deal

By MSN Money staff

In some Americans' worlds, the Great Pumpkin trumps Santa Claus every year.

Halloween has turned into the nation's second- or third-biggest party night of the year, depending on who's counting, behind New Year's Eve and Super Bowl Sunday.

Consumers across the U.S. are spending more than ever on the holiday, which passes unnoticed in most other parts of the globe.

This year, the National Retail Federation expects Americans to spend a record $5.07 billion on costumes, cards, candy and decorations for the holiday, with the average consumer spending $64.82 compared with $59.06 a year ago.

Young adults leading the trend

It's not older, affluent parents driving this surge in spending but a swelling number of partygoers 18 to 24. Of the 18- to 24-year-olds surveyed for the retail federation by BIGresearch, 83% said they planned to celebrate Halloween this year, up from 67% in 2005.

Overall, 59% of adults surveyed said they would observe the holiday in some way, down from last year's 64% but up from 53% in 2005.

More than two-thirds of the 8,877 adults surveyed said they planned to hand out candy this year. About 28% said they would attend or throw a party, and 48% said they were planning to decorate their homes or yards.

Halloween celebrators are decorating the inside as well as the outside of their homes to achieve the perfect "themed environment." Consumers also are spending more on elaborate costumes, rather than hauling out felt and construction paper.

Even Fido can get a costume, such as a $14.99 number at Celebrate Express that transforms a dog into Yoda from the "Star Wars" movies. In fact, 11% of people polled told BIGresearch that they plan to dress up a pet for Halloween this year.

"Many consumers who own pets think of them as family members," said retail-federation President and CEO Tracy Mullin. "Pet owners will go all out to include dogs, cats and other critters in Halloween festivities, including trick-or-treating, handing out candy or even celebrating at a friend or family member's house."

'A break from reality'

One reason for all the celebrating, analysts say, is that in tough times, people feel a need to kick up their heels a bit.

"Halloween is often a time for consumers to set aside their real concerns to focus on the imaginary," says Phil Rist, the vice president of strategy for BIGresearch. "As news about the economy floods the airwaves, many Americans want to take a break from reality to have a bit of fun."

• Video: Halloween costumes on a budget

Though many parents just send their kids down the street for trick-or-treating, a growing number host their own large parties, for kids and adults. Indeed, one-third of adults intend to dress up for Halloween this year, the retail federation reports.

Likewise, schools and municipalities plan their own parades and parties. And the party scene at colleges and universities is getting more hedonistic.

"It just keeps getting bigger and bigger each year," a Seattle party planner says.

Officially, Halloween is the sixth-largest holiday in terms of spending, a drop in the bucket compared with the $474.5 billion the retail federation expects to be spent this year for Christmas and Hanukkah. But Halloween is growing rapidly, boosting retail coffers and putting some consumers more deeply in the red by January.

Updated Sept. 28, 2007