NRF Projects Robust B-t-s Spending But Slightly Under Last Year
This year the outlook for retail has shifted from gloomy to bright.
The back-to-school season will be a good one for retailers but not quite as good as last year, according to the National Retail Federation.
The NRF projects total spending on clothes, shoes, supplies and electronics such as calculators and computers for those attending grades kindergarten through college and graduate school will reach $82.8 billion. That's nearly as high as last year's $83.6 billion. One reason — many parents and students will wait for the best deals.
“With the economy thriving thanks to tax reform and growing consumer confidence, we expect to see a very strong season,” NRF president and chief executive officer Matthew Shay said Thursday. “College spending is expected to be at its highest level ever, and back-to-school will be one of the three highest years on record.”
The figures are from the NRF's b-t-s survey of 7,320 consumers conducted June 29 to July 8 in conjunction with Prosper Insights and Analytics. It has a margin of error of plus or minus 1.2 percentage points. The annual survey has been conducted since 2003.
For children in elementary through high school, the NRF said the average family spend would be $684.79, compared with last year's $687.72. The total spend is seen hitting $27.5 billion, compared to last year's $29.5 billion, and $30.3 billion in 2012, the record high since the survey was taken.
Spending related to stocking up for college and graduate school students will reach $942.17 per household, down from last year's $969.88. However, with more people attending colleges and grad schools, the NRF said, the total spend will reach $55.3 billion, up from last year's $54.1 billion.
The NRF's total estimate on spending for kindergarten to high school students, at $27.5 billion this season, is consistent with the estimate from Deloitte issued Wednesday of nearly $28 billion. However, Deloitte said the total in 2017 was $27 billion while the NRF placed it at $29.5 billion.
According to the NRF survey, b-t- s shoppers plan to spend the most on clothing — $236.90 — on average. Shoppers also plan to spend $187.10 on electronics such as computers, calculators or phones; $138.66 on shoes, and $122.13 on supplies such as notebooks, pencils, backpacks and lunch boxes.
“The biggest change we are seeing in back-to-school spending this year is coming from electronics,” said NRF's vice president for research Mark Mathews. “Items like laptops, tablets and smartphones are now an everyday part of household life and aren't necessarily a purchase parents save for the start of the school year, resulting in the slight decrease in spending for this category.”
Unlike elementary and high schoolers, college shoppers will spend the most on electronics — $229.21 on average. They'll also each spend $153.32 on clothing and accessories; $109.29 on dorm or apartment furnishings; $102.82 on food; $83.41 on shoes; $78.70 on personal care; $69.46 on school supplies; $62.61 on gift cards, and $53.34 on collegiate-branded gear.
NRF said the top destinations for consumers shopping for b-t-s from K to grade 12 are:
• Department stores (57 percent) • Online retailers (55 percent) • Discount stores (52 percent) • Clothing stores (51 percent) • Office supply stores (35 percent)
Similarly, the most popular shopping destinations for those shopping to get ready for college are: • Online retailers (49 percent) • Department stores (40 percent) • Discount stores (35 percent) • Office supply stores (31 percent) • College bookstores (30 percent)
“One trend that we continue to see during the back-to-school season is the strong influence children have on their parents' spending decisions,” Prosper Insights executive vice president of strategy Phil Rist said. “This shouldn't come as a surprise when social media tools such as Pinterest and Instagram have allowed Gen-Zers to be more selective in the items they want. However, the payback for being picky is that parents now expect their kids to contribute toward their back-to-school lists.”
The survey found teenagers will spend $35.60 of their own money on average for b-t-s, while pre-teens will spend $25.06.
Overall retail spending through the b-t-s period is expected to reach a record $595 billion, according to Customer Growth Partners. That represents a 4.3 increase from 2017. CGP's estimate includes all retail categories and demographics, b-t-s and otherwise, but excludes autos, gas, restaurants, food, beverage and home improvement.
“After a slow start due to the long winter, retail has inflected sharply up since late April and has hardly looked back,” said Craig Johnson, president of CGP. “This is the most momentum we've seen in seven years and spans almost all retail sectors.” He characterized this year's b-t-s season as “a key turning point not just for retailers but for overall consumer spending, which drives 69 percent of the economy.”
CGP's research is based on surveys by 18 researchers covering 100 benchmark mall and off-mall locations.