What to expect during the back


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Jul 12, 2023

What to expect during the back

Leading market watchers are sharply divided on whether the critical back-to-school shopping season will be a boom or a bust. On the upside, the National Retail Federation predicts spending will reach

Leading market watchers are sharply divided on whether the critical back-to-school shopping season will be a boom or a bust.

On the upside, the National Retail Federation predicts spending will reach a record $41.5 billion, which translates to about $890 per family. The NRF, a Washington D.C.-based industry trade group and cheerleader, forecasts spending to outfit college students will hit $94 billion, a whopping $20 billion more than last year’s record.

On the downside, the consulting firm Deloitte projects families with kids in grades K-12 will spend 10% less than last year, holding off on buying non-essentials like new clothes. Their take on the numbers: moms and dads will spend $597 per child, compared to $661 in 2022.

Whether consumers spend more or less on back-to-school purchases is of vital importance to retailers. It’s the second biggest shopping season, second to only the winter holidays, and is widely viewed as a harbinger of whether merchants can expect a jolly Santa or a miserly Grinch when Black Friday rolls around.

At Christiana Mall, a dozen retailers, including Apple, are offering discounts to shoppers who show student ID cards. Stores are well stocked, so shoppers feel safe browsing before they open their wallets.

“Retailers being more promotional this year and there’s no problem with inventory,” says Steve Chambliss, Christiana’s general manager. “The only thing we don’t have enough of is people to work in the stores.”

Foot traffic is steady on weekdays and brisk on weekends, with families often combining shopping with a quick bite at the food court. Delaware’s status as a sales tax-free state is an added bonus for the regional powerhouse; 50% of all shoppers at the mall travel from out of state to stock up on computers and electronics, dorm furnishings, and athletic shoes, this year’s hottest apparel category.

In a summer in which record-high heat, torrential rains, and smoke from forest fires have prompted more consumers to shop from home, the mall is benefitting from its 50-year-old concept as a climate-controlled center for one-stop shopping.

“We see people coming into the nice, cool mall from the hot parking lot and they go ‘aahh,’” Chambliss says.

There also are new places to shop at the mall. Among them: Cotton on Kids, an Australian casual clothing concept; Lululemon, a yoga and activewear brand; Torrid, a plus-size clothier; and Gilly Hicks, a leisurewear and lingerie spinoff by Abercrombie & Fitch. H&M, a teen destination, has just completed remodeling.

If shopping feels more expensive this year, that’s because it is. Inflation has pumped up the prices of school supplies by nearly 25% over last year. Still, there are deals to be had throughout the region. Kacky Rementer of North Wilmington shopped Staples’ back-to-school specials. “I picked up wide-lined spiral notebooks for my grandbabies, 50 cents each,” she says.

Here are a few other promotional enticements:

Sneakers are at the top of the list on many back-to-school shopping lists and typically are the priciest apparel items. Kids Foot Locker is taking the air out of prices on some Nike footwear. Boys’ Nike Little Posite One sneakers, originally $185, are on sale for $110.Footwear also is leading the pack in back-to-school fashion, with brand-conscious kids favoring Converse, Dr. Martens, Vans, Skechers, Under Armour and Timberland. Retro and heritage joggers are getting a big boost in the TikTok community, inspiring kids to shop for athletic shoes reminiscent of the sneaks their parents might have worn. Popular colors are white, pastels, and rainbow hues. Pink is popping with the release of the Barbie film at the height of the BTS shopping. Rack Room Shoes is wooing students with its All About You campaign, featuring real-life kids age 6-14.

Shoppers also anticipate spending more on electronics across all ages, with electronics expenditures up 11% to $326 for K-12 students, according to the NRF survey. Electronics spending for back-to-college students is up 12% to $337.So how are mom and dad paying for all this? The word is plastic, according to a CNET Money survey that found 43% of back-to-school shoppers will turn to financing to pay for supplies this year, despite interest rates that now average 22.3%. Of the consumers who charge it, 27% will use an existing credit card, and 12% will open a new credit card account. One in five consumers--20%--will tap retirement or saving-for-college accounts to make ends meet.

The Deloitte survey suggests many parents will hold off spending on non-essentials. "With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families," Nick Handrinos, the firm's vice chair, said in a statement. "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."

Almost half—43%--of consumers who are spending more than last year say it is because they need more new items, the NRF reports. Another 32% have shopping lists with such big-ticket items as a computer, phone, calculator or dorm furnishings. Their top retail destinations: online, department stores and discount stores.

Across the board, shoppers say finding the best deal is a priority.“Even though consumers plan to spend more on school and college-related items this year, they are still looking to find the best value and deals,” says Phil Rist of Prosper, the NRF’s polling partner. “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.”