- Parents are planning to spend less on back-to-school clothing and technology this year.
- Inflation pressures continue to hurt parents’ wallets, even as inflation fell this week to 3.0%.
- Spending intentions on school supplies increased year-over-year, though parents have been searching for deals and discounts.
Many students this upcoming school year may be swapping iPads and laptops for pen and paper.
New data from Deloitte’s “Back-to-School Survey” revealed back-to-school spending for students between kindergarten and twelfth grade is expected to drop 10% for this upcoming school year, with major cuts to apparel and technology. Even as inflation comes down, parents’ wallets are still hurting, leading many families to cut spending on non-essential items.
This brings expected spending per student to an estimated $597, amounting to $31.2 billion in the back-to-school market, a decline from $34.4 billion last year.
This is the first time since 2014 that Deloitte has predicted a drop in spending, citing inflation pressures. The survey included over 1,200 parents of school-aged children and was conducted at the end of May.
“With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families,” said Nick Handrinos, Deloitte vice chair and retail and consumer products leader, wrote in a statement. “Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods.”
Inflation as measured by the Consumer Price Index rose by just 3.0% in June from a year prior, the lowest rate since March 2021. Since its peak last June, inflation has been steadily falling, approaching the Federal Reserve’s 2% target. This data, combined with a cooling but still strong job market, suggests the economy is on track to avoid a recession this year.
Still, according to the Deloitte survey, many parents are worried the economy could worsen this year, influencing their spending decisions. Over half of surveyed parents plan to spend less on back-to-school items compared to last year due to less disposable income.
This disconnect between the economy’s performance and public perception, labeled by some as a “vibecession,” has been fueled by falling real wages and still-elevated prices at retail businesses.
While spending intentions for basic supplies were up 20%, parents planned on spending less on higher-ticket items, with a 14% drop on clothing and 13% decline in tech purchases. Parents may buy more notebooks or staplers in lieu of a $600 laptop, for instance.
Despite a recovering economy, about a third of surveyed households said they were in a worse financial situation than last year. With 51% expecting the economy to weaken later this year, many are searching for bargains and prioritizing required supplies. Many are looking to larger stores with better deals such as Amazon’s Prime Day, as well as online retailers with free returns. Nearly three-fourths of parents expect to shop online this year.
Shoppers are also shopping earlier this year, with 59% expecting to finish shopping by the end of July, compared with 53% last year. Although many parents are being more cautious this year, 60% said they’d still splurge particularly on clothing and accessories.
“Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed,” Handrinos said in a statement. “It’s not all bad news for retailers with many parents willing to splurge on certain items to treat their children, which may provide an opportunity for retailers.
Are you a parent currently back-to-school shopping? Have you had to adjust your back-to-school spending this year? Reach out to this reporter at [email protected].
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