Hershey Says Gas-Squeezed Shoppers Are Buying Less Candy

Candy sales at convenience stores fell 5% in September, and Hershey says the slump has run into October as high gas prices and stubborn inflation squeeze household budgets.

Executives laid out the numbers on Hershey's third-quarter earnings call Thursday. CFO Dave Hulays said consumers are "more cautious on inflation," pointing to gas prices and interest rates as sources of strain. "They are making more deliberate choices across channels," he said, with spending shifting toward mass retailers, e-commerce and warehouse clubs.

Outside convenience stores, the picture looks better. The candy category grew 3.7% in the third quarter, per Hulays, who framed the weakness as "more of a channel and trip problem, not as much a category issue."

What does the squeeze look like in Hershey's numbers?

Hershey's third-quarter net sales rose 3% to about $3.28 billion. But the arithmetic behind that growth is ugly for practitioners: roughly 11 percentage points came from higher prices, while volume fell about 10 points, according to the company's earnings release. Hershey also narrowed its full-year organic net sales growth outlook to about 3% — the low end of its previous 3% to 3.5% range.

The pullback extends beyond one company. Halloween candy sales fell 6.7% in the month ending Oct. 17 versus the same period last year, according to NielsenIQ data reported by the Associated Press. Small bags were the only size still growing. The average price of regular gasoline had climbed to $4.29 a gallon, up nearly 40% from a year earlier — that's roughly $1.20 more per gallon than consumers paid twelve months ago.

Americans aren't skipping the holiday, though. The National Retail Federation projects a record $13.5 billion in Halloween spending this year, up from $13.1 billion last year. Candy accounts for $4.1 billion of that, and 96% of celebrants plan to buy it. The NRF also noted shoppers are approaching the season with affordability front of mind.

Why is candy still expensive when cocoa isn't?

Cocoa, the ingredient behind years of chocolate inflation, has come well off its highs. Global cocoa prices hit a record of about $10,710 per metric ton in January 2025, then fell to $3,241 by March, before rising again this spring as the Iran war disrupted fertilizer supplies to Africa and forecasters warned of El Niño.

Hulays said the industry is coming off a historical surplus of 500,000 to 600,000 metric tons, with healthier inventories and more diversified supply as production rises in new regions such as Ecuador. "We don't expect cocoa to remain at current levels long term," he said.

Shoppers haven't felt the relief. A 100-piece bag of Halloween candy now costs an average of $16.96, up 71% from $9.91 in 2021, according to FinanceBuzz — that's an extra $7 per bag in four years. Government data show candy and gum prices up 44% over five years through September. Higher costs for freight, packaging and other non-cocoa inputs are keeping shelf prices elevated.

What does the final week decide?

With Halloween falling on a Saturday after a late Labor Day, Hershey faces a compressed season. CEO Kirk Tanner, who took over in August 2025 after leading Wendy's, said about 35% of seasonal sales happen in this final week.

"The biggest selling days are still ahead of us," Tanner said, adding that Hershey shipped more Halloween product than last year and its displays are in stores. Consumer surveys show participation intent in line with last year, he said.

"Now we need consumers to show up," Tanner said. "The last few days are really critical."

For 2027, Tanner said Hershey will lean on new products and more affordable pack sizes and price points to win back cost-conscious shoppers. If cocoa keeps drifting lower and consumers keep trading down, expect the fight to move from convenience-store aisles to value packs at the club stores.