Though clothing, shoes, and school supplies will be strong sellers for the back-to-school season this year, spending in the electronics category will be tempered, according to the findings of a new National Retail Federation (NRF) survey. The NRF 2005 Back-to-School Consumer Intentions and Actions Survey, conducted by BIGresearch, found that families with school-aged children will spend an average of $443.77 on back-to-school items, down 8.2 percent from $483.28 last year. Back-to-school spending is estimated to reach $13.39 billion this year, down from $14.79 billion last year.
Most of the spending drop will stem from the electronics category, where spending is expected to fall more than a billion dollars compared to last year ($2.06 billion versus $3.09 billion last year). While 44.0% of consumers plan to purchase electronics for back-to-school, similar to the 41.7% who purchased for that category last year, average spending is expected to fall to $68.08, compared with $101.03 last year.
“Though many consumers will be buying electronics this year, they may be taking a break from spending on high-end computers and other expensive gadgets,” said Tracy Mullin, NRF president and CEO. “It is understandable that, after several years of strong gains and record-breaking sales, demand may cool slightly for electronics merchandise this year. The real windfall for electronics retailers will likely be from college students, who are continuing to spend money on computers, mp3 players, and cell phones.” (NRF will calculate the spending of college students and their parents in its annual Back to College survey, scheduled for release on August 16.)
Other back-to-school items are expected to perform at the same level as last year. More than 90% of consumers plan to buy clothing (93.9%), shoes (92.3%), and school supplies (95.1%). Clothing will once again take the biggest piece of the spending pie, with parents planning to spend an average of $205.31 on apparel, slightly less than the $219.46 they allocated last year. Consumers will also spend an average of $88.54 on shoes and $81.83 on school supplies.
One of the largest shifts in the survey came from changes in spending by region. Consumers in the Midwest, who spent more on average last year than any other region ($571.67) are expected to pull back the reins this year, spending only $404.68. However, consumers in the Northeast, who spent an average of $435.37 last year, plan to bump up their spending to $513.07. Spending in the South will drop significantly ($535.53 in 2004 vs. $434.09 this year) while spending in the West will increase substantially ($381.47 last year vs. $409.19 this year).
Parents have embraced an early back-to-school promotional season this year, and many are already out shopping. According to the survey, one in six parents (16.1%) begins shopping for back-to-school at least two months before school starts. Another 43.9% begin shopping three weeks to one month before school begins.
“Retailers were able to get out in front of the back-to-school season this year with aggressive promotions that enticed parents into the stores,” said Phil Rist, cice president of strategy for BIGresearch. “Though some merchandise categories will struggle, we expect to see retailers create clever discounting strategies that will encourage consumers to buy merchandise now, not later.”
According to the survey, children will also be spending less of their own money this year for back-to-school items. Parents said their teenagers would be spending an average of $20.47 of their own money, down from $38.51 last year. Pre-teens will also be spending less, with parents saying the average pre-teen will spend $8.12 of their own money versus $9.44 last year.
Once again, discount stores will be a major destination for parents, as more than three-fourths of them (77.0%) will head to a discounter to shop for back-to-school items. Consumers will also head to department stores (39.7%), office supplies stores (29.3%), specialty stores (18.8%), and drug stores (14.4%). Others will shop online (13.6%) or through catalogs (4.1%).
