Retailers who release monthly sales next Thursday will offer fresh insight and hard numbers on back-to-school shoppers’ early season spending behavior and that’s a good thing because so far opinions offered by forecasters are all over the place.
Back in early July, Customer Growth Partners said seasonal sales would grow by 6.2% to $467 billion, the most since 2006, despite economic headwinds.
“Navigating nimbly through the minefields of inflation, employment and housing woes, the 91% of Americans with jobs are much savvier shoppers than before the recession -- and they are shopping again,” Customer Growth Partners president Craig Johnson said at the time.
If accurate, the firm’s 6.2% growth forecast would mark the sharpest back-to-school retail growth since the similarly strong 6.2% growth rate seen in 2006 during the height of the housing bubble.
Not long after that forecast came out, the National Retail Federation offered a different perspective based on shoppers’ spending intentions and the news wasn’t good. Families with children in grades K through 12 planned to spend an average of $603 on apparel, school supplies and electronics compared with last year’s average of $606 while college shoppers are expected to spend an average of $808, well below last year’s average of $835.
NRF worked with BIGresearch who conducted an online survey of 8,684 shoppers July 1 to 6.
Around that same time, Deloitte conducted a back-to-school surveyed a smaller group of 1,000 shoppers and came to the conclusion that 86% of households planned to spend the same or more than they did last year. Seven out of 10 respondents cited higher food prices and higher as reasons they may scale back spending this season. The study also indicated consumers will be vigilant about the cost of the items they plan to purchase with 30% of the opinion that prices on new back-to-school merchandise are higher than a year ago.
The curious thing about the Deloitte survey is that even though an overwhelming majority of households plan to spend the same or more than last year, half also said they would buy only what the family needs and one fourth said they planned to re-use last year’s stuff. One third indicated they would consolidate trips to save on gas which bodes well for a company like Walmart which is already a popular destination for one-store shopping.
An even smaller group of shoppers was surveyed by the research firm Toluna on behalf of Buy.com and found that of the 352 people surveyed, 82% indicated they would spend the same or less and 63% of parents are excited about back-to-school shopping.
A diversity of opinions around the subject of consumer spending is to be expected, but most years those opinions are directionally the same with differences related primarily to the size of possible increases or decreases. It is different this year, with estimates ranging widely and conflicting shopper surveys suggesting in turbulent economic consumers don’t even know how much they plan to spend until they actually do so, likely at the last minute as fear mongering over the national debt has eroded consumers already fragile confidence in the economy.