Party Poopers According to Seeking Alpha, the U.S. party supply industry has annual sales revenue of approximately $10 billion. Party City is the dominant player in the industry, with a 16% market share and 910 stores, including franchises. According to Party and Paper Magazine’s annual retailer survey, only half of respondents said sales increased during 2016, compared to 2015, a significant decrease from the almost three-quarters (72%) who reported improved sales during 2015. The average sales increase for 2016 was 6%, but the average decrease for 2016 was 7%, showing a slight contraction in overall sales, despite investments in additional square footage and more employees.

Party Products Particulars Party supply stores refocused on their core business, boosting the party sections from 42% during 2015 to 49% during 2016. Balloon specialty increased from 13% to 23% and there were fewer stores specializing in Halloween/costume and stationary. In the special-services category, party planning increased from 35% to 57%, invitation books decreased from 44% to 38%, balloon delivery decreased slightly from 67% to 64% and imprinting in store was approximately the same. Fewer retailers planned to expand (29% compared to 32% during 2015) or renovate (20% compared to 32% for 2015), but more planned to relocate (20% compared to 17% for 2015). Since square footage increased 18.9% since 2015, this makes sense.

Store Sales and Stats Half of the party supply stores surveyed had annual sales volume of less than $250,000. Nearly a fifth (19%) had annual sales between $250,000 and $749,999; 14%, $750,000 and $1.5 million; and 17%, more than $1.5 million. Party City is the primary national party supplies retailer. Total 2016 revenues were $2.283 billion, a 0.5% decrease. Q1 2017 revenue increased 4.2% to $477 million and Q2 2017 revenue increased 4.9% to $544.9 million. According to the International Licensing Industry Merchandisers’ Association, retail sales of licensed products increased 4.4% during 2016, to $262.9 billion, of which 45%, or $54.6 billion, was entertainment/character licensing products.

Every Life Event Is a Party Halloween accounted for 25% of annual revenues at Party City. During Halloween 2016, the average American spent $82.93, an increase of 11.6%. More than 47% wore a costume, 34.1% attended a party and 29.7% took kids trick-or-treating. According to The Knot 2016 Real Wedding Study, the national average spent in the florist/décor category increased from $2,300 during 2015 to $2,534 for 2016. The average spent on invitations also increased from $445 to $462.  Approximately 26% of parents surveyed by Babycenter.com said they spent more than $500 for their child’s first birthday party, and another poll found that the average child’s birthday party cost approximately $400, not including gifts.

Insider Information More retailers reported higher sales volume for 2016, compared to 2015: $250K–$749K, 19% and 28%; $750K–$1.5 million, 14% and 9%; and more than $1.5 million, 17% and 13%, respectively. Fewer retailers used Facebook than last year (77% compared to 96%), as they move into more visual social networks, such as Instagram (32%) and Pinterest (27%). One- third (33%) used Twitter; 20%, LinkedIn; 22%, other social media; and 20%, none. Online stores recorded their largest increase as party supply stores’ primary competition, from 20% for 2015 to 32% for 2016. Chain retailers remained a strong #2 competitor while independent stores provided less competition.

Advertising Strategies Offer seasonal decorating or party-giving classes in- store to drive traffic. During the Halloween shopping season, sponsor a costume fashion show at a mall, haunted house, park or other public place. Emphasize the social connection of holidays and a full sensory experience to appeal to Millennials.

New Media Strategies Use photos from the major shows (International Halloween Show, Festive Christmas and Seasonal Mega Show) on Instagram and Pinterest to give customers insight into the latest costume and decorating trends and technology. Offer discounts to customers who upload photos of the costumes or decorations they bought from you to your Facebook page with a hashtag. Pinterest should be a major social media platform for party supply stores, highlighting complementary and contrasting decorations and table settings as well as participation ideas for guests.