Price hikes on back-to-school essentials present challenges for consumers
Despite rising inflation, consumers are prioritizing back-to-school and college spending. According to the National Retail Federation (NRF) over one third or 38 percent of consumers have committed to cutting back on other expenses in order to be prepared for the upcoming fall semester. They expect to spend more than usual on both K-12 and college items with the NRF predicting that families will spend 864 dollars on school items, approximately 15 dollars more than last year, on children from elementary through high school age.
For college age children, families are expected to spend 1,199 dollars on college or university items, which is on par with last year but up 223 dollars compared to pre-pandemic numbers. Nearly half of the spending falls into categories of electronics and dorm or apartment furnishings.
Second only to the holiday period, back-to-school is a significant spending period for both consumers and retailers alike. But whereas holiday purchases center on gifting, school expenses are considered essentials by families. As a result, NRF President and CEO Matthew Shay, says consumers, “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.”
Back-to-school spending consistently exceeds pre-pandemic level
Since the beginning of the pandemic, back-to-school shopping has increased dramatically which analysts put down to the changing nature of education and challenges of remote and hybrid classroom experiences. Total spending is up 168 dollars compared to 2019 and is predicted to nudge the 74 billion dollar mark, an increase on last year’s record of 71 billion dollars.
More than half of consumers had already begun bargain hunting in early July, hoping to get ahead of the pressure associated with summer’s end. But 68 percent of shoppers who responded to NRF’s survey reported price hikes in this area leaving many waiting to purchase as the season progresses in the hope of better deals and sales events. Retailers are also uncertain about timing of deliveries and how much merchandise they will receive due to the ongoing chaos in the supply chain.
But there is an upside, says Nikki Baird, VP of Strategy at Aptos, a retail technology provider to fashion brands globally: "Consumers benefit from that uncertainty, if they are savvy about locating what they want, especially as the season comes to a close. In a prolonged work-from-home environment, sometime around Labor Day might be a good time to stock up on home office supplies at a discount."
Phil Rise, Executive Vice President of Strategy at Prosper Insights & Analytics, which partnered with NRF on the study of 7,830 consumers, agrees. “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.”