Halloween has become one of America’s most popular holidays, and spending on the holiday is rising as more adults partake in the festivities. Spending on Halloween costumes is expected to reach $2.8 billion according to the National Retail Federation (NRF) and total spending for the holiday is expected to total $7.4 billion, up from a total of $6.9 billion in spending last year.

The NRF estimates that spending on children’s costumes will total $1.1 billion while adults will spend $1.4 billion on costumes for themselves and another $350 million on costumes for their pets. The NRF’s president said:

There’s no question that the variety of adult, child and even pet costumes now available has driven the demand and popularity of Halloween among consumers of all ages. And, with the holiday falling on a Friday this year, we fully expect there will be a record number of consumers taking to the streets, visiting haunted houses and throwing unforgettable celebrations.

U.S. spending on Halloween costumes, candy, decorations, and party goods has risen by 55% since 2005 and the wealth for retailers has been spread around to home improvement stores like The Home Depot Inc. (NYSE: HD) and Lowe’s Companies Inc. (NYSE: LOW) that now sell a variety of yard decorations, and grocery and drug stores that sell decorations, candy, and costumes, not to mention the alcoholic beverages for all those adult party-goers.

Discount stores like Dollar General Inc. (NYSE: DG) and Wal-Mart Stores Inc. (NYSE: WMT) will get about half of all Halloween spending, according to the NRF, and grocery stores will get about a quarter of it. Here are a few more insights from the NRF:

• 78% of 18 to 24 year olds will dress in costume this year, up from 73% last year.
• The average 18 to 24 year old will spend $87 on Halloween activities this year, up from $78.
• 23 million people will dress their pets in costumes.
• 33 million people will visit a haunted house.
• 54 million people will host or attend a Halloween party.

Last year, Halloween was the fourth biggest holiday for retailers, trailing the winter holiday ($602 billion in consumer spending); back to school/college with $72.5 billion in spending; and Mother’s Day with $19.9 billion in spending.

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