Can Parents Decrease Back- to- school Spending This Season? They Will Try
Deloitte's latest consumer survey examines consumer behaviors amid inflation during the peak shopping season.
Deloitte's latest pulse on the global consumer revealed anxious consumers, overwhelmed by inflation and rising costs, and as parents and students prep for the school year ahead, the company's back-toschool survey shows economic anxiety is taking its toll.
According to Deloitte's annual back-toschool consumer report, which surveyed 1,212 parents with at least one child attending school in grades K-12 this fall, parents are reining in spending to focus on the necessities. Average spend is expected to decrease by 10 percent to $597 per student for an overall back-to-school market spend of $31.2 billion. Importantly, data from the Bureau of Labor Statistics' Consumer Price Index shows a 23.7 percent increase in the cost of school supplies in the past two years.
Consumers across all income levels are expected to prioritize their spending and find ways to save throughout the season, with 31 percent of survey respondents saying they are in a worse financial situation than last year and 51 percent expecting the economy to weaken in the next six months. As expectations to spend on school supplies increases by 20 percent, spending on clothing is expected to decrease 14 percent year-over-year and technology is expected to decrease 13 percent.
Both parents who expect to spend the same or less on back-to-school year-over-year (68 percent) and parents who expect to spend more, cite inflation as the reason. Fiftyone percent of parents who say they will spend less attribute it to reduced disposable income while 75 percent of those spending more point to increased prices.
“With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families,” said Nick Handrinos, vice chair and U.S. retail, wholesale and distribution and consumer products leader at Deloitte LLP. “Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods. Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed. It's not all bad news for retailers with many parents willing to splurge on certain items to treat their children, which may provide an opportunity for retailers.”
Notably, 60 percent of consumers are willing to splurge somewhat when they are spending on clothing, accessories and technology, either wanting to buy better quality products or as a way to treat their child. The authors of the report note that technology spend is still significantly higher than it was in 2019, which could indicate the ongoing importance of the category.
Overall, parents are looking to get items in the most affordable manner by researching the best deals and most are shopping earlier. Forty-nine percent of parents research online before purchasing in-store and for 55 percent this also means researching retailers' return policies. However, only 34 percent of respondents say they “often find lower prices online” meaning 74 percent plan to shop in-store.
Similar to other reports, Deloitte's survey shows that almost 60 percent of spending is expected to occur by the end of July, with 35 percent of shoppers believing that better deals occur earlier in the season versus 26 percent who believe they occur later.
“During the pandemic, the pull forward in back-to-school spending was to overcome concerns around stock-outs, but this year, we see consumers planning to economize throughout the back-to-school shopping journey,” said Brian McCarthy, principal at Deloitte Consulting LLP. “This cost consciousness is causing them to shop earlier, shop in-store to find the best price, and prioritize what they'll purchase to start school. We expect a potentially strong season for brick-and-mortar, particularly among mass merchants who deliver a onestop shopping experience.”
Consumer respondents said they are prioritizing retailers with competitive pricing with 80 percent favoring mass merchants, 60 percent favoring online retailers and many others looking to off-price retailers (33 percent) and dollar stores (33 percent). Forty-six percent of survey respondents say they plan to spend most of their budget at mass merchants.
Prioritizing sustainable back-toschool products is taking a back seat as consumers look to save this season, with plans to buy sustainably declining to 35 percent this year compared to 50 percent in 2022. Forty-seven percent of respondents who will not be purchasing sustainable products this year told Deloitte they are not affordable.