Inflation may be taking a bite out of candy sales, but there are still sweet spots.

Let’s unwrap the confectionery category:

• The National Confectioners Association predicts US confectionery sales (including chocolate, non-chocolate, gum, and mints) will reach $44.9 billion by 2026. Last year, the category drove $36.9 billion in sales.
• While US confectionery sales are up 11.3% year over year (in the 52 weeks ending July 10), inflation is taking its toll, according to Candy and Snack Today. Growth has slowed to 4.6% in the last four weeks of that period, and according to the Consumer Price Index, prices of candy and gum are up 6.9% YoY.
• Non-chocolate candy experienced the most YoY growth in the same time period at 14% ($10.3 billion in sales), while chocolate generated the most sales ($17.3 billion) at a slightly slower growth rate of 9.4%, per Candy and Snack Today. Gum sales grew 13.7% to reach $2.7 billion.
• Eighty percent of candy purchases are impulse, according to Advantage Solutions. That could spell trouble: A May Jungle Scout survey found 72% of US consumers were making fewer fun or impulse purchases because of economic uncertainty.
• In July, Michele Buck, CEO at The Hershey Co., warned the company will not be able to meet consumer demand for Halloween and the holiday season due to capacity constraints. It wouldn’t be a surprise if other candymakers faced similar challenges, especially if inflation and supply chain issues continue to impact raw materials.

Why we care: The category may be seeing some loss recently, but two of the four major candy holidays are right around the corner. Retailers should give consumers a deal they can’t refuse and use deals and promotions to sweeten impulse purchases.

This was originally featured in in the Retail By the Numbers newsletter. For more retail insights, statistics, and trends, subscribe here.