Parents are checking off their Back-to-School spending lists
Cost savings and convenience reign supreme but parents still lift store traffic and sales
- Keisha Virtue
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Inflation will impact how parents shop for Back-to-School this summer
Inflation hit US consumers hard over the last several months. The CPI was 8.5% its year-ago level in July – just slightly below its 40-year high in June. While consumers pulled back on spending in May – with retail sales dipping 0.3% from the previous month – spending rallied in June with retail sales rising 1.0%. Similarly, real spending on durable goods rose 1.2% month-over-month in June after dropping 3.5% in the previous month.
With prices rising and long school lists to check off, many parents in our Back-to-School Shopping survey responded that they would change the way they shop for back-to-school products this year.
Nearly 2/3 of parents will pull back on budget
The average budget this year for Back-to-School shopping is $339. Last year, parents reported they spent $322 per child. This difference in how consumers respond to inflation helps explain why planned back-to-school spending, on average, rose 5.4%. While more than half of parents will cut their budgets to some extent, those whose budgets are not affected plan to spend considerably more than in 2021. The net result, therefore, is moderate growth year-over-year. Predictably, budgets varied widely based on income, with parents earning under $50,000 planning to spend 24.2% less than the average ($257) and those earning over $150,000 spending 60.2% more than the average ($543).
More than half of parents plan to cut back on BTS budgets due to inflation
Deal hunting will be the go-to method for combating rising prices
Most parents plan to use multiple cost-saving methods to allay the effects of inflation. More than half of shoppers (59.5%) will look for sales and coupons. Additionally, many parents will get creative in cutting costs for Back-to-School shopping, like buying fewer products and buying used products. Some parents, like me, will reuse existing school products like book bags, lunch accessories and shoes that are not completely destroyed from the last school year. Older consumers are more likely to look for sales and coupons, while younger parents are more likely to buy used products.
More than half of parents will look for sales to save money
Back-to-School retailers see growth in traffic and sales
Discount stores proved to once again be the Back-to-School shopping mecca, with 78.2% of parents planning to shop at mass merchandisers like Walmart and Target for Back-to-School. More than two-thirds of parents (68.6%) plan to visit online stores and marketplaces for their shopping lists, with the percentage rising for higher-income parents. High-income consumers were also much more likely to shop at office supplies stores, electronics stores, and department stores. And they were also more likely to shop earlier in the summer.
This plays out in July foot traffic patterns. Electronics and office supplies, in particular, saw strong month-over-month gains in visitor traffic of 8.7% and 7.2%, respectively. Department stores, apparel and superstores also saw decent increases from June, as Back-to-School shopping heated up. Similarly, MasterCard SpendingPulse showed solid year-over-year sales gains for department stores (16.6%), electronics (4.3%) and in-store retail (11.1%).
July traffic to electronics and office supplies stores saw strong gains
Omnichannel shopping is even more important to parents this year
While many parents are flocking into stores to shop, many cannot say no to the ease of checking off their formidable school lists online. While participation in all shopping channels, including malls, open-air centers and BOPIS jumped over previous years, online shopping with delivery soared 14 percentage points from 2021. Curbside pickup also saw a meaningful increase of 4 percentage points.
Ah, how well I know it’s appeal. After deciding to shop in-store at my local Target, I went on the school website to download the shopping list. However, once I clicked on the list, it took me to Target’s website, with my online shopping cart fully populated with all the required goods. Who could resist such convenience? I opted for curbside pickup, much to my daughter’s chagrin, only allayed by promising another Target trip in the near future. A week later, in a more leisurely way with no more lists to check, my daughter scored some unicorn-inspired shoes to sport on her first day. Everyone’s a winner.
Delivery surges as a BTS shopping option this year