Do popup stores like Spirit Halloween trick-or-treat Florida's economy?
Halloween has arrived, which means depending on where you are in Central Florida, you could see a lot of ghosts and goblins hitting the street Tuesday night hoping to re-up their candy stash.
Many of these kids will be wearing costumes purchased at seasonal stores that begin popping up this time of year, like Spirit Halloween.
Marc Sardy is an Associate Professor of Business at Rollins College.
He told WMFE's Talia Blake that seasonal stores can sometimes revitalize malls, at least for a short period.
Listen to the full conversation in the player above.
Marc Sardy: Seasonal stores are kind of an interesting group. For example, things like Spirit Halloween do a great deal of seasonal work where they go into strip malls usually vacated by large chains. For example, whenJC Penney, Sears, Toys "R" Us or any of those stores went out left big vacancies in strip malls. They usually come in to the strip mall, and cut a great deal with the strip mall owners, which gives them a kick out clause. So if the strip mall ends up finding a new client, somewhere in June, Spirit Halloween will back off, and they will allow them to fill the space. But generally they pay above market rents for a period of about three months, which is where they do all their business. It not only does a great job of bringing the business into the mall, sometimes revitalizes malls which have not been doing so well since they lost their major anchor tenant. They're all over Florida. So, for the three months, everywhere you go in Florida, you can find them. Usually it's a destination for a lot of people that are going to spend money on Halloween stuff.
Talia Blake: Speaking of Spirit Halloween and where they decided to put their locations, according to Spirit Halloween's website, their guidelines for location is that three month lease, like you talked about, with location between 5,000 to 50,000 square feet, but with the increase of people and businesses moving to Central Florida, is the availability of additional retail space of that size increasing or decreasing?
Marc Sardy: In 2020, there was a huge amount of vacant space in the U.S. There was something along the lines of 159 million square feet nationwide that was vacant. Things have come back quite a bit since 2020. We're looking now probably about maybe only 111 million square feet that's vacant. But if you go around Florida, there's a couple of changes that are important. One, certain businesses moved online. You're seeing a lot more people doing business online. So a lot of small stores are not coming back. There's not as much support for strip malls as there has been in the past. So you find that most strip malls that you look at have one or two vacant stores and some of them had big anchor tenants that are now doing more of their business online, or have run up against the Amazon wall and are out. So it's harder to find large businesses to go into those spaces. So Spirit has the right model, and we may very well see more of these sort of pop up type businesses happening not just around Halloween, but you may see more of it happening around Christmas and other major holidays as well.
Talia Blake: Speaking of the stores popping up in strip malls and all that, how do pop up stores affect neighboring businesses in the area?
Marc Sardy: I think if you go to the traffic, and you say, 'hey, we did really well in the strip mall when you know Sears was here, or when this other big store was here.' Now they're gone. So the traffic that was coming in for those stores no longer happening. And a lot of those smaller stores are struggling. But when Spirit Halloween comes in, and they often keep long hours, it creates a large amount of traffic for all the local stores, which will help bring them in to those local stores as well. I go into Spirit. I go grab a bite to eat at the pizzeria or I go grab something to eat into local store, or maybe I need to go to the phone store or something else that's in that strip mall. So it tends to boost the business for all the surrounding businesses in that mall during that period of time as well.
Talia Blake: So it kind of sounds like there's a lot of positive impacts when it comes to these pop up businesses like Spirit Halloween coming into strip malls that might be struggling or just areas that might be struggling. But are there any downsides to pop up stores like this?
Marc Sardy: Clearly, if you're the landlord, the downside is you're only getting three months of rental out of the place. There are always there's going to be traffic and then it falls off again. So, businesses will ramp up during that period of time. They'll get used to the flow and they may have to seasonally hire more people to handle customers, but then they're going to have to staff down when and if those things go away. Again, I guess it's a trade off. Are you happier that you have the business for a short period of time, rather than not have it at all or would you rather just wait until a big tenant comes in? But as I mentioned a lot of the big box retailers are doing more and more business online. I think COVID did a lot of damage to the idea that 'no I really need to go into the store to buy something.' More and more people are comfortable just buying things direct and having them shipped to the house.
Talia Blake: So speaking of how these pop up businesses are only here for a short period of time, how does it impact the job market here in an area when those pop up businesses come?
Marc Sardy: When you have a pop up stores like that there's a lot of people who take short term employment. So on the one hand you have somebody who hasn't been working get to three months job selling things at Spirit Halloween. On the other hand at the end of three months, they're unemployed again. So there's a downside for the state. Although, arguably Spirit Halloween is going to generate a lot of revenue, both in terms of income for them, which leads to tax revenue for the state, but then potentially have unemployment insurance to deal with after the person is no longer working at Spirit Halloween.
Talia Blake: How big are seasonal jobs here in general in Central Florida?
Marc Sardy: I think seasonal jobs are a big thing in Central Florida. You'll find that someone decided they needed a tree, and so you can see the huge number of pop up tree stands that show up. Right now there's pop up pumpkin stands, and there'll be pop up fireworks stands for the Fourth of July and for New Year's. So, it's a big business. Some of them come from out of state. Some of them come from in state - a lot of the tree farms, there are quite a few of them here in Florida. This is a big market for them. Fireworks as well, there's a lot, but often you're gonna find people driving in from some other states to set up their business. So they may not employ a whole bunch of local people, but it still creates opportunities for locals to get jobs and a lot of traffic for businesses. I don't have to go hunting for something because there's probably one in every corner.
Talia Blake: What's the most important season when it comes to jobs and the local economy?
Marc Sardy: I think you would probably find the Christmas season. In Halloween, we're selling costumes and some decorations for the house. In the Christmas season, you're not only selling decorations for the house, but it's also huge gift season as well. So people are buying all sorts of things from all sorts of retailers. A lot of stores do a high percentage of their business during the Christmas season. A lot happens in that period from the end of October, straight through Christmas. Orders have gone in usually by June. Stuff is delivered probably by September. In fact, we're not even done with Halloween and if you go into a lot of the major stores, they're no longer selling Halloween stuff. They're all selling Christmas stuff. So, I think that's the biggest season but a lot of the other seasons during the year create their own markets. I think that's also good for us.
Talia Blake: You always see the postings by big retailers Target, Walmart, Costco, Sam's Club looking for those seasonal part time workers during the Christmas holidays.
Marc Sardy: One thing, for example, Halloween spending has been going up at a pretty rapid clip. So since 2020, we we're looking at about $10.2 billion in sales in Halloween related. We're probably up in the neighborhood of about $12.6 billion. Florida is roughly around 6.3% of the U.S. So I would say, if last year's Halloween sales were about $663 million in the state of Florida last year, we're looking at probably close to $819 million for the state of Florida this year, which leads to somewhere between $43 million and $53 million in sales tax for the state of Florida as well. So we're estimating just in costume spending nationwide, it's about $3.6 billion of that. So spirits revenue would be about $590 million of that overall. So it's a great business for them. And of course, we know that 90% of their sales happen between Labor Day to Halloween.
Talia Blake: Halloween costumes are not cheap, and it sounds like it's a lot of revenue that trickles back into our economy.
Marc Sardy: Absolutely. I think I probably still have a closet full of costumes from years gone by and it always seems they've got something new and relevant coming out. And that includes the decorations for the house. Every time I walk into a Spirit Halloween I find there's a few things that I didn't think I needed then end up coming home with me.