Back-to-School: Boom or Bust?
Depending on whom you believe, back-to-school spending will be somewhere between flat to up six percent or so over last year.
On the more optimistic side stands Customer Growth Partners. The research firm predicted a 6.2 percent increase for back-to-school spending, the biggest year-over-year growth for the period going back to 2006.
Craig Johnson, president of Customer Growth Partners, told MarketWatch that June’s unexpectedly high numbers were evidence a change is coming. “People are beginning to spend again,” he said. “This augurs for a good back-to-school season and a good holiday season. We are seeing a rebound in discretionary spending.”
The NPD Group sees consumers following almost the exact patterns as last year when it comes to shopping. In fact, the same percentage plan to spend less (38 percent), the same (40 percent) and more (22 percent) as in 2010, according to their research. The lone distinction is that three percent plan to start shopping a little later this year.
As to what will get consumers to spend this year, the biggest reason behind the decision to purchase will be “value” (82 percent), followed by “required” (45 percent), “replacement” (30 percent), “child wanted it” (22 percent), “trendy/fashionable” (12 percent) and “influenced by friends” (two percent).
“While the differences in the numbers aren’t all that dramatic, there are dramatic indications of changes in consumption patterns,” said Marshal Cohen, chief industry analyst, The NPD Group, in a press release. “The study’s results clearly point out that consumers will be shopping later, looking for value, and searching out lower priced options.”
The National Retail Federation’s projections for back-to-school are slightly below last year’s. According to a survey conducted for the association by BIGresearch, families will spend an average of $603.63 this year compared to $606.40 last year.
“Families aren’t opposed to spending on what they need, but parents want their children to take a good look around at what they already have before deciding what to buy for back to school this year,” said Matthew Shay, NRF’s president and CEO, in a press release. “Retailers understand consumers are extremely focused on value and are taking this opportunity to offer substantial savings on merchandise.”
Nearly 44 percent said economic factors are behind their decisions to spend less. The survey found consumers plan to buy more store brands (39.9 percent), comparison shop online (29.8 percent), and look for sales (50.0 percent).
- Positive June sales augur well for back to school – MarketWatch
- NPD Annual Back-to-School Spending Intentions Report – The NPD Group
- Back-To-School Sales Expected To Be Flat As Parents Practice Restraint, According To NRF – National Retail Federation
Discussion Questions: Considering the rise in commodity costs over the past year, is it possible that consumers will be able to buy what they need for back-to-school and still keep to 2010’s spending levels? Will retailers be put in a position to give the store away if they wish to compete?