Back-to-School Sales to Gain Most Since 2003 on Pent-Up Demand

Consumers Expected to Begin Shopping Earlier

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Back-to-school spending in the U.S. is poised to increase the most since 2003 as shoppers replace apparel and electronics that their kids had to "make-do" with last year, according to a survey. The average person with students in kindergarten through 12th grade plans to spend $688.62 on clothing and supplies, jumping 14% from $603.63 a year earlier, the National Retail Federation said. The NRF cited a survey of 8,509 consumers conducted by BIGinsight between July 2 to July 9.

While pent-up demand and increased enrollment will drive sales, 85% of consumers with school-aged kids said the economy will still affect their spending this season, as the unemployment rate lingers above 8% and consumer confidence dropped in July to the lowest level this year.

"People don't look at back-to-school shopping as a discretionary expenditure," said Matthew Shay, CEO of NRF. "A significant number of consumers indicated that they couldn't hold off on these purchases any longer."

Total spending for all students, including those in college, is expected to rise to $83.8 billion from $68.8 billion a year earlier, Kathy Grannis, an NRF spokeswoman. College students and their families are expected to spend an average of $907.22 , up from $808.71 last year.

Still spooked by a recovering economy, 67% of consumers plan to shop at discount stores for school apparel and accessories. Same-store sales for discounters like TJX Cos., which owns T.J. Maxx and Marshalls, were boosted by consumers looking for deals in June.

Retailers will ramp up promotional savings as consumers plan to scour department stores and the Internet for the best deals, Mr. Shay said. Nearly 40% of consumers plan to take their shopping lists online, up from 32% a year earlier.

"The budget-conscious consumer has not forgotten about price, quality or value," said Pam Goodfellow, consumer-insights director at BigInsight. "We're merely seeing a more savvy shopper."

Electronics retailers may also see an increase in traffic during the back-to-school season as compared with last year, with 60% of respondents saying they're looking to invest in smartphones, tablets and other devices after putting off these purchases in past years.

Consumers are also beginning back-to-school shopping earlier this year, as parents hope to spread out their spending, the report said. And retailers are racing to snatch up those early spenders. Target has already begun advertising "smart deals for back to college" on the top of its website, with links to a checklist and array of college essentials. And Macy's has posted a "college lifestyle" section on the homepage of its website.

"We fully expect retailers to be aggressive with their promotions both in-store and online, keeping an eye on inventory levels as families look to spread out their shopping throughout the entire summer," Mr. Shay said.

-- Bloomberg News --

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