Back-to-school daze
Early sales flat, but analysts undaunted
With a new school year kicking off, across America, everything seems to be on schedule — except for back-to-school sales.
Despite the economy growing and unemployment continuing to shrink, back-to-school spending has so far remained flat in relation to last year, according to analysts who track the retail sector. That’s not what was expected. The National Retail Federation said it expected spending on elementary and high school students to grow 8 percent from last year.
Add in college students, and spending was seen growing 10plus percent, according to the NRF. So what’s going on? Well, parents might be waiting for stores to panic and start offering larger markdowns.
“School is going to start this year, but where’s the big rush?” says Marshal Cohen, NPD’s chief retail analyst. “It hasn’t come yet.”
In all, Cohen says he expects the money spent on getting students ready for school to grow by 2.5 percent to 3 percent when the dust settles on the season, which he defines as lasting through the end of September.
That kind of bump is not that shabby, Cohen said, especially given that “retail is running slack right now.”
That being said, Cohen says he remains optimistic for the sector, it’s just that consumers are increasingly choosing to stagger their purchases both to suit their budgets and in order to take advantage of sales and other incentives like sales tax holidays.
“They’re not rushing out to buy corduroy pants and sweaters just yet,“he says.
“Parents are taking their time in buying back-to-school items, adds NRF spokeswoman Ana Serafin Smith. “Let’s not forget that these are parents who were highly impacted by the recession, so they’re looking for bargains.”
Despite the slow start, Serafin Smith says the NRF is sticking by the bullish outlook made in July.
“Consumers are in a really good spot right now,“she argues. “Unemployment being down is really important, but wages are also going up.”
Says Serafin Smith of these retail consumers: “They have a budget and they’re going to spend it.”