Easter falls really early this year. Why that could cost retailers $1.6 billion.

By Charles Passy

Easter sales will total $22.4 billion in 2024, according to the National Retail Federation - a 7% decline from last year

Could the Easter Bunny's early arrival in 2024 be the cause for less-than-hopping holiday sales?

The National Retail Federation estimates that spending for the springtime holiday, which falls on March 31 this year, should total $22.4 billion, almost a 7% decline from last year's record-setting mark of $24 billion. And a survey from WalletHub, a personal-finance site, found that nearly seven in 10 people are planning to spend less for Easter this year.

The timing of Easter Sunday varies from year to year - the date is tied to lunar happenings and can fall as early as March 22 and as late as April 25. Retailers that spoke with MarketWatch say they generally benefit from the holiday landing on the later side and they're especially feeling the pinch this year as a result.

Maryellen Derr, proprietor of Maryellen's, a Pennsylvania bakery that specializes in cake pops and offers its products on QVC (QVCC), said her sales are off by as much as 30% this Easter. She added that her customers have already indulged in enough sweets and treats during Valentine's Day, Mardi Gras and St. Patrick's Day, so they're not quite ready for the sugar rush of a late-March Easter.

Similarly, Tommy Gallop, co-owner of Beverly Hills Teuscher, a shop that specializes in the Swiss chocolate brand, said he's seeing at least a 10% sales decline. He cited a "Valentine's Day hangover" as the specific culprit.

But Neil Saunders, a retail analyst with GlobalData, said the sales hit is not necessarily about consumers recovering from earlier holidays. Rather, he argued that when Easter falls later, consumers are inclined to make one small incidental purchase after another in the buildup to the big day: Think buying a box of marshmallow Peeps every time you're in the drugstore to pick up a prescription or other item.

Easter is "an elastic category that can expand with a longer period of selling time," Saunders said.

Speaking of Peeps, Saunders' point is echoed by Just Born, the company that produces Peeps, an Easter staple. Just Born officials said sales do fluctuate depending on how early or late the holiday falls. The company produces two billion Peeps annually, the majority of which are made for Easter.

Hershey's (HSY), the prominent candy company, said this year's Easter sales are in line with expectations. Mars, another major name in candy, didn't respond to a request for comment.

Easter is 'an elastic category that can expand with a longer period of selling time.' Neil Saunders, GlobalData retail analyst

Of course, the cost of Easter chocolate could be a concern for consumers, given the steep increase in cocoa futures. Still, it appears that surge hasn't affected retail prices yet, according to a recent MarketWatch analysis.

Still, Easter is about more than candy. Katherine Cullen, the National Retail Federation's vice president of industry and consumer insights, said sales of sweets might not be the key factor behind this Easter retail decline.

Rather, Cullen said NRF's research shows consumers are buying fewer Easter outfits. The likely reason? People associate the holiday with the arrival of warmer weather, Cullen said - and it's not as desirable to buy that spring ensemble when there's that March nip in the air.

Moreover, broader economic factors could be at play in the Easter decline, experts say. They particularly cite inflation, which still stands above 3%, as a decisive issue.

WalletHub analyst Cassandra Happe said the decline is likely due to a confluence of factors: the early arrival of Easter, ongoing inflation woes and high levels of consumer debt.

With all that happening at once, the end result is "a reduction in discretionary spending for holiday celebrations," said Happe.

The good news for retailers is that Easter will fall much later next year - April 20. Derr, the cake-pop maker, is relieved to know that the calendar will be on her side in 2025.

"That's a month-and-a-half after St. Patrick's Day," she said.

-Charles Passy

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03-30-24 1225ET

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