Back-to-school spending falls

Staff Writer
Columbus Parent

School doesn't start until later this month, but George White is already shopping for the supplies his two boys will need for class.

Unlike last year, White plans to buy only the necessities. "They're only getting the things they really need, like clothes to replace the ones they outgrew last year and whatever pencils and crayons they need," the East Side resident said. "That's about it."

Many consumers are planning to follow suit. Back-to-school sales are expected to be down 7.7 percent this year compared with last year as the recession drags on and parents worry about layoffs and salary cuts, according to a new study from the National Retail Federation.

The study found that 85 percent of consumers will alter their back-to-school spending this year, buying only what they need this year and taking advantage of discounts and promotions.

"The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers," said Tracy Mullin, president and CEO of the Washington-based trade association, in a statement. "As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shoppers this year."

The average family with students in grades kindergarten through 12 is expected to spend $548.72 on school merchandise, down from the $594.24 spent last year, the survey found.

This is significant considering that back-to-school represents the second most important season for retailers, behind the end-of-the-year holiday period. Total spending on back-to-school needs is expected to fall to $17.4 billion, the retail group predicts.

The recession could work in consumers' favor, with retailers expected to offer aggressive discounts and attractive deals, said Dianne Kremer, an analyst with BIGresearch, the Worthington-based group that conducted the survey for the retail federation.

"Retailers are going to have to fight more to get that consumer in their door and be more intuitive for what consumers want this year," Kremer said. "Consumers are looking for needs over wants this year, and retailers who can convey that desire and that value will likely be more successful.

"The key for retailers is to get consumers in their doors quicker with early discounts to spread out the impact that back-to-school supplies will have on consumers' budget."

A majority of consumers, 74.5 percent, say they'll shop discounters for back-to-school deals, the survey found. Big Lots is in the process of setting back-to-school products in some of its stores, said Tim Johnson, vice president of strategic planning and investor relations at the Columbus-based discounter. "It's a store-by-store, market-by-market situation because different parts of the country go back to school at different times," he said. "We participate in our own way - with school supplies, backpacks, lunch supplies, kind of the basics." The Polaris store, for example, recently began putting out displays with those items, he said.

The study found that spending on electronics and computer equipment is likely to be the one bright spot with sales of items in that category expected to rise 11 percent this year.

Even so, Big Lots doesn't go out and search for those items specifically for back-to-school shoppers, Johnson said. "The challenge for us is being consistent in an item because our sourcing is through closeouts, and some items are not always available," Johnson said.

By the numbers

Consumers say the recession has caused them to rethink their back-to-school spending. A look at what consumers plan to do:

  • 56.2 percent of back-to-school shoppers will hunt for sales more often.
  • 49.6 percent plan to spend less overall.
  • 41.7 percent will buy more store brand/generic products.
  • 40 percent plan to increase their use of coupons.
  • 11.4 percent say children will cut back on extracurricular activities or sports.
  • 5.7 percent say that the economy is affecting whether their children will attend a private or public school.

What they'll buy

Families will spend an average of:

  • $204.67 on clothing and accessories
  • $93.59 on shoes
  • $82.62 on school supplies
  • $167.84 on electronics and computer equipment

Source: National Retail Federation