Back-To-School Spending To Hit Record High As Parents Hunt Deals

Consumer spending on both back-to-school and back-to-college shopping is expected to break records and bust through the $40 billion milestone this year.

Contents

Back-To-School Records Parents Feel The Squeeze Electronics Boost Sales

However, inflation is squeezing budgets and parents will be looking for bargains and deals to make their dollars go further according to two major surveys.

Back-to-school is typically the second largest family spending event after the holiday season, and unsurprisingly shoppers are heavily motivated by deals, especially with school supplies prices increasing 23.7% in the past two years according to Deloitte.

But records are expected to tumble, with shoppers flocking online, to department stores and discount stores.

So some retailers are hoping for a welcome bumper boost. You do the math.

Back-To-School Records

Back-to-school spending is expected to hit $41.5 billion, up from $36.9 billion last year and the previous high of $37.1 billion in 2021. In tandem, back-to-college spending is expected to reach $94 billion, soaring up $20 billion over last year’s record, according to the annual survey by the National Retail Federation (NRF) and Prosper Insights & Analytics.

“Back-to-class shopping is one of the most important consumer shopping occasions of the year. Our research for 2023 shows American consumers are eager to jumpstart their back-to-school and college purchases early,” NRF President and CEO Matthew Shay said.

In a separate survey, consultant Deloitte said that although parents were willing to endure higher prices last year for replenishing back-to-school items after the pandemic, 18 months of inflation “have changed their tune”.

It said that uneasiness about the economic situation is creating price sensitivity and causing parents to reassess how they approach shopping for the upcoming school year.

Parents Feel The Squeeze

Deloitte believe that parents across all income groups are planning to spend less this year, contrasting with the NRF survey, and predicts that total spend will drop 10% year over year as the focus switches to the necessities, such as school supplies, while holding off on non-essential purchases like tech and apparel.

It says the shopping journey will be centered around finding ways to economize, researching the best deals, shopping earlier, and figuring out how to purchase items in the most affordable manner.

Indeed, with value in mind the NRF says that shopping in preparation for the return to school is already well underway. As of early July, more than half (55%) of consumers buying for back-to-class said they had already started shopping.

This is on par with last year, but is up from 44% in 2019, and is in line with the trend of consumers shopping earlier for major spending events.

Electronics Boost Sales

Families with children in elementary through high school will spend an average of $890.07 this year, about $25 more than last year’s record of $864.35 and a new high.

This is primarily driven by more demand for electronics, says NRF, as 69% of back-to-school shoppers expect to buy electronics or other computer-related accessories this year, up from 65% last year and the highest in the survey’s history.

Total spending on electronics is expected to reach a record $15.2 billion, with the top electronics purchases laptops (51%), tablets (36%) and calculators (29%).

College students and their families are expected to spend an average of $1,366.95 per person, up from $1,199.43 last year, and a new record from the previous record of $1,200.32 in 2021. Since 2019, back-to-college spending has nearly doubled.

“Consumers are stretching their dollars by comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than last year,” Prosper Executive Vice President of Strategy Phil Rist said.

Read the full article here