As inflation continues to rise, one-third of retail consumers (38%) say they are cutting back in other spending areas to cover the cost of items for the upcoming school year, reports the National Retail Federation and Prosper Insights & Analytics.
They said research shows that families expect to spend more per person on both K-12 and college items this year as a result of higher prices.
“Families consider back-to-school and college items as an essential category, and they are taking whatever steps they can, including cutting back on discretionary spending, shopping sales and buying store- or off-brand items, in order to purchase what they need for the upcoming school year,” says NRF President Matthew Shay.
He adds that the back-to-school season spending is second only to the winter holiday season each year.
Total back-to-school spending is expected to match 2021’s record high of $37 billion. Families with children in elementary through high school plan to spend an average of $864 on school items, approximately $15 more than last year.
Back-to-school spending has increased dramatically since the onset of the pandemic as families adjusted to changes from virtual and hybrid learning, NRF notes. Compared to 2019, back-to-school shoppers are expected to spend $168 more on average, and total spending is up $11 billion.
Total back-to-college spending is expected to reach nearly $74 billion, up from last year’s record of $71 billion and the highest in the survey’s history. More college students and their families plan to shop this year compared to last and anticipate spending an average of $1,199 on college or university items, consistent with last year’s record of $1,200.
Since 2019, total expected spending on back-to-college has grown by $19 billion and consumers are spending $223 more on average than they were prior to the pandemic. Nearly half of this increase comes from spending on electronics and dorm or apartment furnishings.
Like other recent holidays, shoppers are starting early to find the best deals and help spread their budgets. As of early July, more than half (56%) had started shopping.
Consumers may be motivated to get a jump on their back-to-class shopping this year given the impact of inflation and higher prices. A majority (68%) of survey respondents said they have seen higher prices on school items. Clothing and accessories and school supplies were among the top areas where consumers have noticed higher prices.
There is still plenty of shopping outstanding, with the vast majority (85%) of back-to-school and college families indicating in mid-July that they have at least half of their shopping remaining. The top reasons why consumers had not checked items off their lists are because they do not know what is needed yet and they are waiting for the best deals.
Given this year’s inflationary pressure, traditional sales events may play a larger role for back-to-school and college shoppers. Compared with their pre-pandemic habits, back-to-school and college shoppers plan to concentrate their shopping rather than spreading it out across multiple destinations.
“We are seeing real shifts in the way people are shopping and spending on back-to-class items since before the pandemic,” says Phil Rist, Prosper Insights executive vice president. “As a result, retailers are also shifting by bringing in inventory earlier and extending back-to-class offerings,”
The top five back-to-school shopping destinations are online (50%), department stores (45%), discount retailers (40%), clothing stores (37%) and electronics stores (28%).