Back to school boon for re­tail­ers, malls

Sales ex­pected to grow 10.3% this year to $84B, trade group pre­dicts.

Austin American-Statesman - - BUSINESS - By James Peltz Los An­ge­les Times

The $84 bil­lion back-to-school shop­ping sea­son is back just in time as far as be­lea­guered mall mer­chants are con­cerned.

Con­sumer spend­ing on kids and young adults re­turn­ing to the class­room not only is the sec­ond-largest shop­ping pe­riod be­hind the win­ter hol­i­days, but it’s one when many con­ven­tional brick-and-mor­tar stores are hold­ing their own against the surge of on­line com­pe­ti­tion.

Al­though the growth of e-com­merce has forced dozens of U.S. re­tail chains to close thou­sands of lo­ca­tions at malls and else­where, an­a­lysts said that chil­dren and their par­ents still like vis­it­ing stores to pur­chase items on their back-to-school lists — note­books and lunch boxes and clothes and com­put­ers.

“This is one cat­e­gory where we’re see­ing a sur­pris­ing level of sup­port for the in-store ex­pe­ri­ence,” said Jim Mills, who heads the South­ern Cal­i­for­nia con­sumer busi­ness prac­tice for Deloitte, the con­sult­ing and au­dit­ing firm.

Back-to-school shop­pers plan to do most of their buy­ing in phys­i­cal stores, ac­cord­ing to a sur­vey con­ducted for the Na­tional Re­tail Fed­er­a­tion by Pros­per In­sights & An­a­lyt­ics.

On­line shop­ping came in third, tied with cloth­ing stores, when con­sumers were asked to name all the places they were plan­ning to do their buy­ing. Nearly 46 per­cent of those sur­veyed said they would do some on­line shop­ping, al­most un­changed from a year ago but up about 10 per­cent­age points from 2015, show­ing the strong growth of e-com­merce.

In a sep­a­rate sur­vey, the In­ter­na­tional Coun­cil of Shop­ping Cen­ters trade group found “that 68 per­cent of shop­pers said they don’t en­vi­sion buy­ing all of their school sup­plies on­line,” spokes­woman Stephanie Cegiel­ski said.

“Peo­ple still want to see and touch and in­ter­act with prod­ucts,” she said.

Re­tail­ers in­creas­ingly are mak­ing it eas­ier for con­sumers to or­der prod­ucts on­line and then have them de­liv­ered to their homes or pick them up at the store. The lat­ter op­tion of­ten prompts shop­pers to stroll else­where in the store to buy other mer­chan­dise or — in the case of Wal-Mart Stores Inc. and Tar­get Corp., for in­stance — pick up gro­ceries, as well.

For many young­sters and their par­ents, the store vis­its are as im­por­tant as the con­ve­nience of e-com­merce. It’s one thing for kids to give their par­ents a hol­i­day wish list and hope for the best, and quite an­other for kids to de­mand a se­lect type of notebook, back­pack or ap­parel after they’ve looked them over in per­son, an­a­lysts said.

“They’re on­line a lot, don’t get me wrong,” NRF spokes­woman Ana Ser­afin Smith said. “But they’re us­ing on­line more to do re­search than to ac­tu­ally pull the trig­ger and buy.”

The NRF’s re­search also is show­ing that youths age 20 and un­der are “re­ally in­ter­ested in bring­ing the brick-and-mor­tar ex­pe­ri­ence back” for buy­ing back-to-school items, Ser­afin Smith said. “They love go­ing into the stores and shop­ping the way their grand­par­ents did.”

In con­trast to back-to-school shop­ping, the win­ter hol­i­days find par­ents of­ten pre­fer to shop with­out their chil­dren. The NRF’s 2016 hol­i­day shop­ping sur­vey re­flected that, with on­line shop­ping out­pac­ing ev­ery other store cat­e­gory: About 52 per­cent of shop­pers planned to buy on­line; the No. 2 cat­e­gory was depart­ment stores at 42 per­cent.

Back-to-school sales, in­clud­ing those for young adults re­turn­ing to col­lege, are ex­pected to climb a stout 10.3 per­cent this year to $83.6 bil­lion from $75.8 bil­lion, the NRF es­ti­mates, cit­ing stronger em­ploy­ment, higher con­sumer con­fi­dence about the econ­omy and lower gaso­line prices.

The Con­fer­ence Board, a busi­ness trade group, last week said its con­sumer con­fi­dence in­dex rose in July to its high­est level since mid-2001.

“This is good news for re­tail­ers, ar­riv­ing just as the back-toschool re­tail sales sea­son is be­gin­ning to heat up,” said Chris Christo­pher Jr., ex­ec­u­tive di­rec­tor for eco­nom­ics at the re­search firm IHS Markit.

“Our fore­cast calls for growth of 4.3 per­cent in back-to-school re­tail sales this year com­pared to last year, which would be the strong­est growth since 2014,” Christo­pher said.

The por­tion of back-to-school sales for kids in el­e­men­tary school through high school is fore­cast at $29.5 bil­lion, and the por­tion for col­lege stu­dents is $54.1 bil­lion, the NRF said.

NUCCIO DINUZZO / CHICAGO TRI­BUNE

Lavinia John­son, with her chil­dren Micah Blanks, 11, and Brook­lyn Banks, 10, shop for back-to-school sup­plies in late July at a Wal-Mart in Chicago. Re­search shows chil­dren en­joy the brick-and-mor­tar ex­pe­ri­ence where they can see and touch the items they are in­ter­ested in.

ALYSSA POINTER /MIL­WAU­KEE JOUR­NAL SEN­TINEL 2014

Re­tail­ers are see­ing a “sur­pris­ing level of sup­port” for in-store shop­ping when it comes to back-to-school lists, in­clud­ing clothes, says an an­a­lyst in Cal­i­for­nia for con­sult­ing firm Deloitte.

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