Back-to-School Blues
Sales for the Back-to-School season are shaping up to be a challenge for retailers counting on the new academic year to boost business.
Two surveys out on Aug. 14 show that parents and students are pinching their pennies.
Britt Beemer, founder and chief executive of America’s Research Group, based in Charleston, S.C., revised his Back-to-School survey and forecasted that same-store sales at outlets open at least one year will drop 4 percent compared with last year. Beemer was more optimistic in early August when he predicted same-store sales would only dip 1.5 percent.
One of the reasons for the bigger decline is that the slower economy resulted in a lot of students not nabbing a summer job. “This whole summer jobs thing is more evident to me every day,” Beemer said. “What it is doing is making the parents in control of their children’s spending. Last summer when kids had a summer job, 60 percent of the spending came from the kids’ money and 40 percent came from the parents. Now parents are accounting for 85 percent to 90 percent of that Back-to-School spending.”
That means parents and their children are shopping at JCPenney to find better prices and sales and not at places such as Hollister Co., Beemer said.
In the annual Back-to-School survey conducted by The NPD Group Inc., a research firm based in Port Washington, N.Y., 35 percent of those surveyed expect to spend less at the stores compared with last year, when 25 percent said they would spend less.
The most vulnerable categories are apparel and footwear stores versus school supplies, said Marshal Cohen, the NPD analyst who authored the survey.
“I found out that consumers are buying more in-season products and more casual products. They are not projecting far out,” Cohen said, noting that the Back-to-School season could last well into late September or even October. “Some people said they are only buying a couple of things, one or two outfits before school, and focusing on warm-weather products. Half the world goes back to school in shorts and T-shirts.”
Parents are waiting later to purchase fall and winter items, such as corduroy pants, hoping they go on sale.
Some 81 percent of consumers in the NPD survey said they were planning to shop at discount stores while 25 percent said they would be shopping at department stores. That is about the same as last year. —Deborah Belgum
