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Back to School Trends

Sep 1, 2008

One fifth of parents nationwide have set aside a portion of their stimulus check for back to school purchases, according to the National Retail Federation's 2008 Back to School Consumer Intentions and Actions Survey, conducted by BIGresearch among 8,361 respondents. The survey found that the average family with school aged children was expected to spend $594.24 on back to school purchases, compared with $563.49 a year ago. Total back to school spending for kindergarten through 12th grade this year is estimated to reach $20.1 billion.

Another survey, however, forecasts a lower overall back to school expenditure. Opinion Research Corporation conducted the survey of 1,012 U.S. households on behalf of the International Council of Shopping Centers and UBS.

In that study, about 38 percent of respondents said they expect to spend more this year than last year, with 15 percent reporting that they will spend less. Based on the findings, average back to school spending is expected to be about $400 per household.

While according to the NRF study, spending in most categories is expected to remain flat compared with the previous year, spending on electronics is set to continue to rise as many parents plan to spend some of their tax rebate check on household electronics, such as computers and cell phones.

"Strong promotions and must have brands will help retailers stand out in the crowd, as shoppers look for the best bang for their buck on back to school purchases this year," said Tracy Mullin, president and CEO of the NRF. "While cost will be the deciding factor, some families will use rebate checks to soften the blow, taking advantage of promotions and deals when they can."

A large majority of consumers, 73 percent, said they planned to head to discount stores for back to school purchases this year, trying to stretch their dollar as far as possible. Others, 56.6 percent, said they would head to department stores, 47.8 percent to clothing stores, 21.4 percent to electronic stores, 41.8 percent to office supply stores, and 18.2 percent to drug stores.

As comparison shopping becomes more popular among consumers looking for the best deals and gas prices remain high, 24.8 percent of back to school shoppers indicated they would buy online, compared with 21.4 percent a year ago.

"This year's back to school shopper is a bargain hunter at the core," said Phil Rist, VP of strategy at BIGresearch. "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."

The ICSC/UBS survey, "Suggests that the consumer will be looking for value in their purchase," said Michael P. Niemira, chief economist and director of research for ICSC. Nearly 90 percent of households indicated they would shop at discounters this year.

That number is up from 49 percent just three years ago. Meanwhile, 73 percent of households reported that they would be buying apparel this year, the highest percentage since 2004. "These survey results suggest the middle income spending squeeze is likely to force shoppers to seek out value destinations in order to stretch their budgets," said Neil Currie, U.S. food, drug and discount retail analyst for UBS.

When it comes to how much say children have in parents' buying decisions, more than half of parents in the NRF study said their children influence at least 50 percent of back to school purchases.

While results from the back to school survey were surprisingly strong, anticipated spending on college merchandise is expected to wane this year. Back to college spending, which has helped buoy retail sales for the past five years, will drop seven percent this year, from an average of $641.56 per person a year ago to $599.38 this year, according to the study.

Total back to college spending is expected to reach $31.26 billion this year. The combined back to college and back to school spending is forecast to total $51.4 billion.

"College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat," said Mullin. "While students will still be buying school supplies, they will scale back spending on clothing, electronics and dorm furnishings."

Spending on shoes by this group is expected to remain flat at an average of $58.46. Just one category, school supplies, is forecast for a notable increase from an average of $63.52 last year to $68.47 this year. Spending on collegiate gear (a new category) is expected to average $35.26 per person.

"Though every college student wants the latest and greatest gadgets, students are being frugal this year," said Rist. "While some may opt for a cheaper model, many students may take advantage of computer labs at school or a family computer at home, instead of investing in one themselves."

Many students are adapting to the current economic environment by living at home, according to the survey, with 54.1 percent of college students commuting to campus from their parents' houses this year.

College bookstores are most likely to be affected by a drop in back to college spending, with just 41.8 percent of students planning to buy from those stores, a sharp decrease from 57.2 percent a year ago. Nearly a third of college students indicated that they will shop at clothing stores this year, compared with 34.3 percent in 2007.

Topic: Business Strategies

Related Articles: school 

Article ID: 720

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