Back to School Surveys: Retail Sales May Be Flat

Washington–While major retailers are already touting their latest back to school offerings through advertising and social media,  cautious American families are likely to spend about the same overall as last year and most of the sales may fall later in the season.

That’s the overall scenario that several recent consumer surveys released this week predict.

The National Retail Federation (NRF) said today families with children in grade kindergarten to 12 will spend an average of $603.63 on apparel, school supplies and electronics—nearly equal to the 2010 figure of $606.40. Total back to school spending is expected to reach $22.8 million.

Combined with back to college spending the season’s total could beach “$68.8 billion, serving as the second biggest consumer spending event for retailers behind the winder holidays,” the NRF noted.

“Families aren’t opposed to spending on what they need, but parents want their children to take a good look around at what they already have before deciding what to buy for back to school this year,” said Matthew Shay, NRF’s president and ceo.

Earlier this week, The NPD Group, Inc., a leading market research company, released its back to school study of consumers’ purchasing intentions which also found that consumers may spend about the same as last year and will shop later in the season.

According to the NPD, 66.6% of respondents said they plan to spend $250 or less on back to school purchases this year. But that is a seven point increase over 2010. “This is an indication that consumers are starting out the season planning to spend less money than last year,” said Marshal Cohen, chief industry analyst at NPD. “The number of consumers that plan to spend over $750 dollars remained the same as last year.”

How Much Do You Plan on Spending for  the Back-To-School Season 2011 2010
$250 or les 66.6% 62.2%
Between $251 – $50 19.3% 22.3%
Between $501 – 750 6.1% 7.2%
Between $751 -1000 3.9% 3.9%
Between $1001 – 1500 1.2% 1.2%

Source: The NPD Group, Inc.

Cotton Incorporated also reported this week that according to its Lifestyle Monitor survey, consumers are planning to spend about $223 on back to school this year.

Although there were differences among the surveys about just how much American consumers will spend for back to school, the underlying message is that they will be buying cautiously and perhaps in different retail channels as they look for more value for their dollars.

Noting consumers more cautious mindset and intentions to spend less, Cohen added: “There is a silver lining here, the consumer is telling us they are going to spend it is just less and in new places if need be.”

The NRF survey found that 43.7% said the economy is forcing them to simply spend less in general.

Department Stores To Benefit

The value-centric philosophy pervading consumer’s buying contentions is confirmed in some of the NRF’s study, conducted by BIGresearch. Half of the respondents said they would be shopping sales, while 39.9% said would be purchasing more store-brand or generic items. About 29.8% said they would be comparison shopping more online, too.

Of their back to school spending, $220.60 would be spent on their children’s clothing, $88.99 on school supplies and an average of $104.53 on shoes, a slight increase over last year.

While average spending on computers, cell phones, mp3 players and tablet devices is expected to increase slightly to $189.51, 51.9% of families with school-aged children plan to purchase electronics this year, down from last year’s historically-high 63.7%  The percent of people who plan to purchase apparel, shoes and supplies will decrease, too, the NRF study found.

When they go shopping for back to school, American shoppers will be scrutinizing where they shop and paying attention to private labels, promotions and social media campaigns. Department stores are expected to benefit the most: the NRF found 57.0% planned to shop department stores, up from 53.9% last year and the highest in the survey’s eight-year history.

Nonetheless, the NRF survey found that shoppers plan to make at least one purchase from a discount store (68.4%), clothing stores (48.7%), office supply stores (38.0%) and electronics stores (21.7%) will also be popular. Additionally, online shopping will edge up as 31.7% will shop online this year vs. the 30.8% last year.

When the NPD Group asked consumers about their plans to shop online for back to school, 16% said they plan to shop online while last year almost 18% said they had plans to shop online.

Shopping Closer to Start of School

“Even though consumers say they will spend less online this year, I think the lateness of shopping coupled with the value-centric mindset will drive more consumers to shop there,” said Cohen, “Online will be the place can find those back-to-school items no longer available in stores.”

Retailers may start bringing in their back to school merchandise right after the Fourth of July, but both the NRF and NPD surveys found parents most likely will be shopping closer to the beginning of the school year.

According to the NRF study, 42.4% of families will begin shopping three weeks to one month before school starts; another 31.2% will begin their shopping one to two weeks before school starts, a 24.8% increase over 2010. Some 21.8% will get a jump start and begin shopping two months before the new school year and the remainder will shop the week school starts (2.0%) or after school starts (2.6%).

Like their parents, teenagers will spend about the same amount as last year for certain apparel, supplies and accessories, the NRF report found. Teens are expected to shell out an average of $31.64 for school items, compared to $31.74 last year. Pre-teens, largely reliant on their parents for an allowance, will spend less this year–$15.12 vs. $18.27 in 2010.

And while parents usually foot the bill for the back to school merchandise, the NRF survey found that 62.2% of parents say their children influence 50% or more of back-to-school purchases. 

Back to College:  Four out of Five  Shoppers Say Economic Worries Influence Spending

In its 2011 Back-to-College survey, also conducted by BIGresearch, the NRF found 83.7% or about four out of five respondents say concerns over the economy will influence their spending plans. For instance, more shoppers than last year will purchase store brand or generic products (38.0% vs. 34.1% in 2010), and more will comparison shop online (30.7% vs. 23.2% in 2010). Additionally, many shoppers are making do with last year’s items (29.7%) and spending less overall (44.6%), similar to the trends seen in the NRF’s 2011 Back-to-School survey.

“College students and their parents, who are likely also spending thousands of dollars on tuition, will be looking for ways to stretch their budgets and find good deals this year,” said Shay. “To compensate, retailers will spread out their promotions to capture the attention of shoppers whenever they’re in the mood to spend, and will use every resource they can to prominently promote everything from bedding to mini refrigerators and, of course, laptops and smartphones.”

According to the survey, parents and students will spend an average of $808.71 on everything from apparel and electronics to dorm furnishings and food items, down from $835.73 last year.

The survey found 45.8% of students and their parents will buy electronics, the lowest level since 2005. However, electronics will still take up the largest portion of shoppers’ budgets with the average person expected to shell out $209.93, an 11% decrease over last year’s $236.94. Freshman will spend the most on electronics: $281.94 on average.

College age shoppers will plan to spend $127.37 on clothing and accessories, $96.84 on dorm furnishings, $94.60 on food items, $61.48 on school supplies  and $64.44 on personal care items. Another $60.46 is expected to be spent on gift cards for the college students to fill in where needed.

Department stores also stand to gain sales with college students as well. Nearly half, 47.6% of families with college-aged children will shop at a department store, up from 42.5% last year. Others will shop at discount stores (53.9%), drug stores (19.4%), home furnishing or home decor stores (11.2%), office supply stores (33.4%), clothing stores (34.2%) and electronics stores (19.6%). Online retailers will see a nice boost in traffic this year– one-third (33.4%) of respondents plan to shop online, up from 28.6% last year, the NRF found.

Similarly to the K to 12 survey, back to college sales will tend toward later in the season. However, this year’s survey found that 24.4% of college shoppers will begin their shopping at least two months before school starts, the highest percent since NRF began conducting the survey in 2003. Another 28.9% will head to stores three weeks to one month before school starts, 27.9% one to two weeks before, 9.4% will shop the week school starts and 9.4% after school starts.

NRF’s 2011 Back to School and Back to College Consumer Intentions and Actions Surveys were designed to gauge consumer behavior and shopping trends related to back to school spending and back to college spending. The surveys were conducted for NRF by BIGresearch. The poll of 8,684 consumers was conducted from July 1 to 6. The consumer polls have a margin of error of plus or minus 1.0%.

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