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July 30, 2012

Back-to-school shopping

By MARCELLA S. KREITER

The dog days of summer used to be for lazing about at the beach or swimming hole.

Nowadays, both students and parents are shifting into back-to-school mode, and with some school districts opening their doors as early as the second or third week in August, the back-to-school shopping season already is in gear.

Purdue University consumer sciences and retailing Professor Richard Feinberg notes back-to-school shopping is second only to Christmas in importance to retailers, with receipts expected to total $84 billion this season.

Helping the spending along are relatively lower fuel prices.

"Every penny saved on a gallon of gas translates to $1 billion available for retail spending," Feinberg said in a release.

Among the biggest sellers? Backpacks and laptops.

"Spending on electronics will be almost as high as apparel," he said.

Feinberg said the shopping starts about four weeks before the start of school to allow for shipping by online retailers.

The National Retail Federation estimates parents will spend an average $688.62 per child, kindergarten through 12th grade -- if dad does the shopping, spending averages $739.75, much of it at department and electronics stores; but if mom does the shopping, spending falls to $640.42, much of it at discount stores. Total spending on elementary and high school students is expected to reach $30.3 billion. Add in college students and the total reaches 83.8 billion.

Some 9 million students are enrolled in nursery schools or kindergarten, 32.7 million in elementary schools, 16.6 million in high schools and 20.3 million in college, U.S. Census Bureau figures show.

"When it comes to their children, there's nothing more important to a parent than making sure their children have everything they need, even in a tough economy -- and especially when it comes to back-to-school shopping," NRF President and Chief Executive Officer Matthew Shay said. "Backpacks rip, pencils break and children grow. There's no way around it. But as they begin tackling their shopping lists, parents will make sure to spend smarter than they ever have before.

"We fully expect retailers to be aggressive with their promotions both in-store and online."

Parents are expected to spend an average $246.10 on clothing and $217.88 on electronics, plus $129.20 on shoes and $95.44 on school supplies.

A survey of 8,509 consumers July 2-9 for NRF by BIGinsight found consumers are still wary of the economy and so plan to shop the sales, with an eye on lower prices offered on private-label merchandise, using the Internet to comparison shop.

"There's no questions consumers have become more practical in their shopping, and with school purchases oftentimes considered a necessity, parents have likely been saving and scrimping to be able to fully afford all of their children's needs for the upcoming school year," BIGinsight Consumer Insights Director Pam Goodfellow said.

The survey found teens and pre-teens will be chipping in, spending an average $25.63 on what they want for school -- $10 more than last year.

For college students, the numbers go up. Families are expected to spend an average of $907.22, up nearly $100 from last year, for everything from dorm furniture to personal care items. College freshmen will spend the most, an average $929.35 per student, followed by graduate students ($879.89), sophomores ($812.97), juniors ($767.41) and seniors ($680.70).

"Despite the relatively soft economic conditions over the last quarter, consumers view back-to-school merchandise as essential, which is likely a key reason that so many consumers plan to increase spending this year," said Michael P. Niemira, International Council of Shopping Centers vice president of research and chief economist. "Even more encouraging for retailers is that nearly 20 percent of respondents [to a July 12-15 survey] plan to increase spending by more than 10 percent compared to the 2011 season. Looking ahead, the industry should continue to see increases in sales as the intensity in back-to-school season shopping heats up next month."

Market research company NPD Group Inc., in a survey of 2,500 consumers July 2-10, found a third of consumers plan to spend more this year while a quarter plan to spend less, but NPD doesn't expect heavy spending to kick in until temperatures start to drop.

"The summer heat wave in much of the country is a possible contributor to the delay in back-to-school shopping," said Marshal Cohen, NPD chief industry analyst.

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