You have enough really good things going on in this story that I almost wish I didn't have to complain about it. Almost. I think you have a good set-up here; my quarrel is with how you've chosen to develop it.

As I read this story, I inevitably thought of Stephen King and began crafting my comments using his stories as the context. Sort of a What would Stephen do? approach. Apparently you anticipated as much; towards the end, you actually incorporate King into your story; you have your main character ask—Wait for it—What would King do?

I don't think he would have a problem with being appropriated in such a way. He does similar things all the time. Usually it takes the form of a bad joke, an obvious cliche, a tired line that he should have known better than to try and use. But sometimes he just can't help himself, so he tries to cheat by giving the line to one of his characters, then having them self-referentially note "Gosh, what a corny thing to say," or some such bit of trickery. It never works but we tolerate it from him because of he's such a savant when it comes to plots, the village idiot who wanders the streets babbling at all hours of the day and night, except that when King babbles, stories fall from his lips fully formed. He might not always deliver them with the most elegant of prose, but he never fails to tell a good story.

Your story is one that he might have thought up. King's contribution to the horror genre was to free it from the realm of fairy tales and plop it right down the middle of Main Street— the gas station on the corner, the Quick Mart in the next block, the school auditorium, the local movie theater, the neighbor's garage... everyday life, into which the fantastic and the supernatural inexplicably intrude.

In your case, Gemma Blackstone wanders into an antique bookstore, in search of... well, we're not sure, and probably neither is she. She just wants to browse. If there's something she's meant to find, like any book lover she'll know it when she sees it. What she discovers, instead, is quite different.

I think it's important to point out what type of plot this is not: what I think of as "The Martian Invasion." You know how that one goes: the meteor impacts with an explosion and right away twenty-story tall beings emerge from the crater and begin vaporizing innocent bystanders. Such an intrusion reaches its full impact right from the get-go. Your characters know at once that things have slipped off the grid: they see the evidence, they get it, and they respond. A bona fide miracle would fit into this category as well: golden coins streaming out of thin air; dead Uncle Herman sitting up in his coffin interrupting his own wake; a blind date turning into a wolf as he drives to the high-school prom. Nothing wrong with such a plot, but it hinges not on the nature of the supernatural intrusion, but instead on the characters' reactions and efforts to survive.

That's not the story you're telling here—at least it shouldn't be. This story is a "Did I Really Just See That?" type of plot. It relies on a time-tested progression as both characters and readers confront the impossible and take the long walk to accepting it as possible. The progression is always similar. First there's utter disbelief, perhaps even a refusal to see what is right before our eyes. Then we have equivocation, where what's seen is accepted, more or less, but dismissed as "coincidence," or maybe "exhaustion," or any of a dozen interpretations, none of which hold up to logic but which still seem more logical than accepting a magical/supernatural interpretation. And then there is the gradual transition from disbelief to belief, during which all manner of emotions are relevant: anger, horror, fear, resistance, terror. We don't handle the unexplained easily, and the only explanation that works continues to seem impossible. But finally the point is reached where psychological explanations just don't cut it and we have to accept the unacceptable. In your case, that would be the moment that Gemma realizes that the curious old bookseller is actually demon whose intent is clearly malevolent.

There's a word for that progression towards belief: it's called story. it is precisely the arc of your main character's shifting awareness of the situation in which they find themselves. The problem you have with your story is that you've frontloaded the whole process. Your demon comes at us like a Martian invader. Almost from the very first, we know what he's about and we see the rest of it coming a mile away. We'll keep reading because you're a good writer and it seems like you might surprise us and take the whole thing in an unexpected direction.

You don't. Instead, when you really need to be getting a plot under way, all you come up with for your two characters is to make them talk about the set-up. It's a good set-up, as I've already stated, but set-ups are not stories—they are the fertile ground in which a true story can take root and grow. You tease us with possibilities but you deliver little. The ending, totally grafted on, has nothing to do with this story and should be junked. Or maybe held in reserve for the novel you might turn this into some day. But as a short story, your scope is inside the book store. That's where you've placed your characters and that's where your plot needs to unfold.

So, where will you find your plot? Unfortunately you don't have a story maker of your own to channel, so you'll have to fall back on basic craft. You need to go back to the drawing board and rethink Gemma, not only in terms of who she is—you seem to have a good handle on that, but she can sit motionless in a chair and be who is—but in terms of what she needs. What is it that will put her in motion, that makes continuing the status quo unacceptable?

You offer some possibilities when you talk about the jocks she tutors and the Halloween party she is planning reluctantly to attend that evening. At the moment such information is simply dumped on us, then ignored. So your first challenge is to figure out how her relationship with the jocks gives a purpose to her book store excursion. If you can't make that connection, get rid of the jocks, the party, even Halloween, since none of them at the moment figure into your story proper at all. (The entire interaction with the demon could take place any time during the year. Halloween is just gratuitous decoration.)

Of course, you'll still need to give Gemma something to motivate her, something she needs, something that is not specifically related to the book store, but which the book store might offer a solution to.

Then there's that whole progression thing; that will require a bit narrative technique on your part. Right now, Gemma (and the reader) knows from the outset that the bookstore is malevolent. There's so much heavy foreshadowing we can't help but get it. But if Gemma had a real world motivation of some sort, that could be what occupies her thoughts and actions and your readers as well. Then you can gradually introduce the growing horror. Maybe let the dust accumulate gradually; perhaps the jack-o-lanterns don't start dripping blood right away and their evil expressions start out as benign gap-toothed carvings; maybe the old man starts out as just an old man; maybe the books are real books at the start, transforming into grimoires and tomes of evil only as things kick into gear.

The challenge at the core isn't at all bad. The demon's demand that Gemma come up with a story is intriguing, but you need to put yourself into Gemma's world, let yourself follow her path as she moves from mundane space to supernatural horror, ask yourself how it might unfold in your own world, how might you respond? Only by placing yourself in the midst of the world you've created will you provide the elements that will allow your readers to do so as well. And unless you manage that trick, they'll never ask that most crucial of questions: Gosh, I wonder what's gonna happen next. Instead, they'll stop reading.