Families Expected to Spend Average of $864 on Back-to-School Supplies
As inflation continues to rise, one-third of consumers (38%) said they are cutting back in other spending areas to cover the cost of items for the upcoming school year, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics. Families expect to spend more per person on both K-12 and college items this year as a result of higher prices.
“Families consider back-to-school and college items as an essential category, and they are taking whatever steps they can, including cutting back on discretionary spending, shopping sales and buying store- or off-brand items, in order to purchase what they need for the upcoming school year,” NRF President and CEO Matthew Shay said. “The back-to-school season is among the most significant shopping events for consumers and retailers alike, second only to the winter holiday season.”
Total back-to-school spending is expected to match 2021’s record high of $37 billion. Families with children in elementary through high school plan to spend an average of $864 on school items, approximately $15 more than last year. Back-to-school spending has increased dramatically since the onset of the pandemic, as families adjusted to changes from virtual and hybrid learning. Compared to 2019, back-to-school shoppers are expected to spend $168 more on average, and total spending is up $11 billion.
Total back-to-college spending is expected to reach nearly $74 billion, up from last year’s record of $71 billion and the highest in the survey’s history. More college students and their families plan to shop this year compared to last and anticipate spending an average of $1,199 on college or university items, consistent with last year’s record of $1,200. Since 2019, total expected spending on back-to-college has grown by $19 billion and consumers are spending $223 more on average than they were prior to the pandemic. Nearly half of this increase comes from spending on electronics and dorm or apartment furnishings.
Like other recent holidays, shoppers are starting early to find the best deals and help spread out their budgets. As of early July, more than half (56%) of shoppers had started shopping for school and college supplies.
Consumers may be even more motivated to get a jump start on their back-to-class shopping this year given the impact of inflation and higher prices. A majority (68%) of survey respondents said they have seen higher prices on school items. Clothing and accessories and school supplies were among the top areas where consumers have noticed higher prices.
There is still plenty of shopping outstanding, with the vast majority (85%) of back-to-school and college families indicating they have at least half of their shopping remaining. The top reasons why consumers have not checked items off their list are because they do not know what is needed yet and they are waiting for the best deals.
Given this year’s inflationary pressure, traditional sales events may play an even larger role for back-to-school and college shoppers. Most (81%) said they planned to use retailer deals during the week of July 11 to shop specifically for school and college items. Approximately three out of five (62%) will shop Prime Day deals on Amazon, 31 percent will shop online deals at other retailers and 20 percent will shop in-store deals at other retailers.
“We are seeing real shifts in the way people are shopping and spending on back-to-class items since before the pandemic. As a result, retailers are also shifting by bringing in inventory earlier and extending back-to-class offerings,” Prosper Insights Executive Vice President of Strategy Phil Rist said.
Compared with their pre-pandemic habits, back-to-school and college shoppers plan to concentrate their shopping rather than spreading it out across multiple destinations. The top five back-to-school shopping destinations are online (50%), department stores (45%), discount retailers (40%), clothing stores (37%) and electronics stores (28%). Top back-to-college shopping destinations are online (43%), followed by department stores (36%), discount stores (29%), office supply stores (27%) and college bookstores (26%).
The survey of 7,830 consumers, the most comprehensive back-to-class annual survey, was conducted June 30-July 7 and has a margin of error of plus or minus 1.1 percentage points.
AUTHOR: Isaac M. O’Bannon – CPA PracticeAdvisor
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