NRF: Back-to-school spending set to eclipse $75b

Dive Brief:

Back-to-school spending is on a “stock up” cycle rather than a “make do” cycle, the National Retail Federation said Thursday. U.S. families will spend $75.8 billion in the run-up to the new school year, compared to last year’s $68 billion, according to the NRF’s annual survey, conducted by Prosper Insights and Analytics.
Families with children in grades K-12 plan to spend an average $673.57 on apparel, electronics, shoes and school supplies, up from last year’s $630.36, for a total of $27.3 billion, a 9.6% increase from last year’s $24.9 billion.
Total growth in K-12 back-to-school spending has risen 54.8% over the past 10 years, the NRF said.

Dive Insight:

The NRF notes it's seeing a predictable pattern emerge: Spending increases one year as families stock up on supplies, drops off the next because so many things last so long, then rebounds in year three because children have outgrown clothing or items need to be replaced.

We're now in a “replenishment” year, but there are also significant signs that back-to-school shoppers are less worried about the economy than in the recent past. Families with children still at home, in grades K-12, will on average spend 7% more this year, while spending on college kids on average will decline 1%, the NRF says.

“Families are still looking for bargains, but there are signs that they are less worried about the economy than in the past,” NRF President and CEO Matthew Shay said. “Heading into the second half of the year, we are optimistic that overall economic growth and consumer spending will continue to improve as they did in the first two quarters of the year. We fully expect retailers to be aggressive with offering great deals both in stores and online for back to school shoppers. And retailers will keep a close eye on inventory levels as families spread out their shopping throughout the summer.”

Still, shoppers are keenly aware of how to get deals, the survey found. While 43% shop for sales (up from 41% last year), 32% compare prices online, up from 31%. The number who say they’ll spend less is down to 23% from 27% last year, according to the survey. In addition, 27% say the economy won’t affect their back-to-school spending, up from 24% last year and the most robust number in the survey’s history, according to the NRF.

“The budget-conscious consumer is not forgetting about price, quality or value, and we continue to see this when it comes to back-to-school shopping,” Prosper principal analyst Pam Goodfellow said in a statement. “That is why many parents are taking advantage of shopping early, scouring ads and websites for the best deals, and taking advantage of free shipping with online purchases.”

eMarketer earlier this month projected sales during the back-to-school months of July and August will rise 2.6%, up from 1.6% last year. Meanwhile, Deloitte’s “2016 Back-to-School Survey” of K-12 parents found they will spend an average of $488 before school starts, with early shoppers likely to spend 26% more than those who shop later.