Halloween May Help Walmart Break Curse

Retail Giant Aims to Cut Into Temporary Shops' Sales With Store Sections Devoted to Holiday, Exclusive Limited-Edition M&Ms

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Walmart is banking on a big Halloween to scare up sales it needs to break a nine-quarter streak of declining same-store sales, having increased purchases of Halloween merchandise by 20% over last year, according to people familiar with the matter.

Part of the effort to get the sour taste of decline out of its mouth is White Chocolate Candy Corn M&Ms. The limited-edition Mars product exclusive to Walmart is in short supply in many stores, and some people have taken to eBay, Amazon or the website CandyCornMMs.com to sell the product at three times or more the price of $3.49 bags retailed for at Walmart.

A spokeswoman said the limited-edition M&Ms. remain on sale at stores while supplies last and declined to confirm the 20% increase in Halloween-related merchandise. But the chain has clearly given added space and prominence to Halloween sections at many stores, which have begun to rival smaller versions of increasingly prevalent temporary Halloween shops.

Walmart's strategy aims at cutting into the growing success of such stores. The bankruptcy of such chains as Circuit City and Borders have left storefront vacancies that have enabled temporary stores to grow like a fungus feeding on the decaying flora of overbuilt bubble-era strip malls. Mall retailer Spencer Gifts is the largest player in temporary Halloween shops, with nearly 1,000 locations nationwide this year. But a host of other smaller operators also ply the market.

Halloween is one holiday that appears to be recession- and stagnation-proof, with recent National Retail Federation surveys finding consumers plan to boost spending 9% to an average of $72.81 on the holiday each year., and that the percentage of the U.S. population planning to participate in Halloween has risen from 52.5% in 2005 to 70% this year. According to Kathy Grannis, director of media relations for the NRF, Halloween spending has been driven largely by an increase in adult participation.

Thanks to more people participating, the NRF expects total spending on the holiday to soar even faster -- by 17% to $6.8 billion this year. So Walmart's 20% push, while aggressive, has some wind at its back.

And it couldn't come at a more crucial time. Speaking at Wal-Mart Stores' annual analyst conference earlier this month, Walmart U.S. CEO Bill Simon said his unit has strung together three consecutive months of positive same-store sales for the first time in more than two years. Trouble is , one of those months was July, the last month in the retailer's fiscal second quarter. The quarter still had negative same-store sales overall for the flagship U.S. unit. So Walmart is still counting on a big October to officially end the losing streak this quarter.

Fueled by social media as well as promotions and print-at-home coupons on Walmart.com, Mars has lent at least a small hand on the Halloween front with its Candy Corn M&Ms. Despite the name, they don't taste like candy corn, but they have generated substantial managed buzz.

Several bloggers affiliated with shopper/social-marketing agency Collective Bias began promoting the Candy Corn M&Ms. last month. A spokesman for Collective Bias declined to comment, and a Mars spokeswoman didn't return a call and email for comment.

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