A study by Deloitte found that 71% of households will spend less on back-to-school shopping this year, with 48% of consumers surveyed saying they would spend more than $100 less. "Consumers have been pessimistic for several months, primarily because of the strains on their budgets from higher gas and food prices," said Stacy Janiak, leader-U.S. retail at Deloitte. "These survey results indicate that consumers will likely stick to the basics this fall, and parents may be saying 'no' more often as they head to the register."
That's unwelcome news for the nation's retailers, many of whom have already launched elaborate campaigns aimed at capturing the attention of tweens and teens. JC Penney's "Breakfast Club"-themed campaign kicked off last week. Sears is partnering with a slew of online social-networking and entertainment sites. And Kohl's is looking to attract attention with its exclusive lines from Avril Lavigne, Lenny Kravitz and Hayden Panettiere, among others.
"Back to school is a very important time for us," said Mike Boylson, chief marketing officer at JC Penney. "A lot of our biggest businesses peak during the time frame and our advertising spend reflects that."
Second-most important season
Behind the holiday season, back to school is the most important shopping period of the year. And a poor showing would certainly be a blow to the already embattled sector.
A survey from the National Retail Federation, however, does offer some hope, noting that 20% of parents said they had set aside a portion of their stimulus checks for school-related purchases. That's expected to lead to a slight increase in spending for the period, as total sales are projected to rise to $20.1 billion from $18.4 billion. Back-to-college spending, meanwhile, is expected to drop from $31.7 billion to $31.3 billion.
"College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat," said Tracy Mullin, NRF president and CEO, in a release. "While students will still be buying school supplies, they will scale back spending on clothing, electronics and dorm furnishings."
Turning to discounters, online
Students and parents will also be turning to discounters, both studies found. According to Deloitte, 88% of consumers will do their shopping at discount and value department stores, while 37% will shop at dollar stores. The study also found that 53% of consumers plan to use more coupons and 33% will be looking for private-label products.
NRF said online shopping will also increase, as consumers look for deals and try to curb spending on gas. This year, 25% of consumers said they will shop online, compared to 21% last year.
"This year's back-to-school shopper is a bargain hunter to the core," said Phil Rist, VP-strategy at BigResearch, which conducted the NRF survey. "Though parents want to make sure kids are fully prepared for school, they will be comparing prices online and in stores before making any big purchases."