Business

Comments | Recommended

This year, parents spend more carefully on back-to-school items

01:00 AM EDT on Sunday, August 24, 2008

By Paul Grimaldi

Journal Staff Writer

Two-thirds of survey respondents said they would spend $50 or less per child on supplies this year.


NYT / TONY CENICOLA

Parents in Southeastern New England, like their counterparts around the country, are getting a lesson in economics this summer as they confront rising prices on almost everything, including the things their children need for school.

With schools in the region opening this week and next, retailers are hoping for a last-minute infusion of cash to salvage an otherwise desultory back-to-school shopping season.

“We’re aware the economy is tough right now,” said Katie Sullivan, a public-relations manager at office-supply giant Staples Inc., in Framingham, Mass. “We’re trying to make it easier for people.”

Nationwide, Americans are spending carefully on back-to-school items this year, according to a number of surveys, although whether consumers will spend less overall than they did in previous years, or simply spend differently, remains unclear.

Higher gasoline and food prices are causing a significant number of people to spend less this year than last, according to Deloitte LLP, a national business consultancy.

“Consumers have been pessimistic for several months, primarily because of the strains on their budgets from higher gas and food prices,” said Stacy Janiak, a retail researcher for Deloitte. “Consumers will likely stick to the basics this fall and parents may be saying ‘No’ more often as they head to the register.”

Deloitte found 71 percent of participants in its mid-July survey planned to slash school-related spending and about 80 percent said they will buy more back-to-school items on sale this year. More than half, 53 percent, will use more coupons when they shop.

Researchers at Corporate Research International found 74 percent of respondents who were surveyed during the first week of August and who had children in elementary or middle school planned to buy back-to-school supplies at a superstore or warehouse club. More than 80 percent cited price as the number-one reason for choosing those discount stores.

“It’s not surprising that consumers are more discerning during these times,” said Mike Mallett, chief executive officer of Corporate Research, a marketing research company in Findlay, Ohio. “It’s interesting to note that the majority of consumers aren’t necessarily reducing their spending in this area but they are looking for more value for their dollar.”

For instance, the majority of the people who responded to the survey conducted Aug. 2 to Aug. 7 indicated they would spend less than $150 per child on school clothes. Only 26.1 percent planned to spend less on school clothing than they did last year.

Nearly two-thirds of the more than 800 respondents said they would spend $50 or less per child on supplies this year. About one-third said they would spend more on school supplies this year than last, while nearly a quarter — 24 percent — said they expected to spend less this year.

The trepidation of consumers appears to be causing problems for some retailers. Sales fell 0.1 percent last month, the weakest performance in five months, as shoppers shunned autos and other big-ticket items.

Analysts said the poor showing in July, the last month for bulk mailings of federal stimulus checks, raised concerns about consumer spending in the coming months.

“Cautious and uncertain consumers are watching their wallets and with the back-to-school shopping season under way, that does not bode well for retailers,” Joel Naroff, chief economist for Naroff Economic Advisors, told the Associated Press last week.

For the week ending Aug. 9, chain-store sales decreased 1.1 percent from the previous week. Sales at stores open at least year, considered a key measure of retailer health, came in only 2.6 percent higher than the same week a year ago.

“Customer traffic picked up over the last week, but cautious back-to-school spending held back the sales pace for the week,” said Michael P. Niemira, chief economist of the International Council of Shopping Centers, an industry trade group.

On Tuesday, discounter Target Corp. said profit was down 8 percent in the second quarter and sales at stores open at least a year were down 0.4 percent.

Niemira said he does expect sales to pick up heading toward the Labor Day weekend, with same-store sales for August finishing up about 2 percent from August of last year.

The back-to-school shopping period typically is the second-largest spending period of the year, after Christmas.

Back-to-school spending nationwide, including purchases by college students, is expected to rise about 2.5 percent, to $51.4 billion, compared with last year, according to the National Retail Federation, in Washington, D.C.

If that projection holds true, back-to-school spending will be at its lowest increase in at least five years, researchers noted.

To lure in shoppers, and get them to spend once they arrive, stores are diversifying their products, offering deeper discounts, advertising more and increasing promotional packages.

OfficeMax Inc. began its “Power to the Penny” campaign, offering some school supplies for 1 cent in early July as children in other parts of the country headed back to school.

Staples began rolling out its back-to-school advertising campaign about the same time. The Staples effort included television ads called “Gas” and “Grocery,” promising to reduce the cost of school shopping. It’s also offering items for a penny.

“Right now, we have a lot of teachers coming in,” said Sandra Howarth, operations manager at the Staples on North Main Street in Providence.

Just like their students, teachers stock up on school supplies each year, she said.

“They spend a lot of their own money,” on classroom supplies, Howarth said. “They spend more than the kids.”

Yesterday, Staples stores in the region gave away freebies and raffled off items to teachers who came into their stores, she said.

The store typically sees a wave of spending in the first week of September, as college students return to the city and their younger counterparts get supply lists from teachers.

“A lot of parents get the teachers’ lists and that’s when we’ll see parents coming in,” Howarth said.

Sporting goods stores also benefit from spending that follows along with the school calendar.

“We have two Christmases,” said Bob Estrella Sr., owner of the Gob Shop in Warren.

Spring sports participants show up in March and April to buy lacrosse, field hockey gear and the like, while August and September are the months for sales of soccer gear, he said.

“It appears very strong for the athletic end of things,” Estrella said. “We haven’t noticed . . . people finding it difficult.”

But he said he isn’t so confident about the selling season next spring.

“After the shock of paying heating bills,” Estrella said, people may pull back on buying sporting gear just as they have this year on school supplies.

pgrimald@projo.com

Advertisement

Reader Reaction