Merchants must be jumping for joy with word that back-to-school shopping is in a “stock up” cycle, meaning that classroom supplies, clothes and shoes that consumers stretched to last more than one school year will need replacing by September.
That’s according to the National Retail Federation, which annually predicts in July how much will be spent outfitting K-12 and college students for the next school year. The expectation is that shoppers will spend $75.8 billion, up from $68 billion last year.
The outlay will be welcome after bleak sales early in the year.
Discounter Target reported in May that sales dropped 5.4 percent in the fiscal first quarter compared to the same period last year, and expressed some worry that second-quarter numbers would be “tempered” if consumers remained hesitant about spending.
Macy’s blamed “continued weakness in consumer spending levels” in apparel for a 7.4 percent decline in fiscal first-quarter sales versus 2015, and said “the uncertain direction of consumer spending” makes predicting future performance “difficult.”
Meantime, the U.S. Commerce Department, which reports on retail sales monthly, said June’s numbers showed that sales at clothing, general merchandise and department stores were lower when compared with the same month last year.
But back-to-school, stretching from mid- to late-summer, is an important sales period, ranking No. 2 in overall consumer spending for the nine special occasions — including Mother’s Day (No. 3), Easter (No. 5) and Halloween (No. 8) — tracked by the National Retail Federation. The No. 1 sales period — between Thanksgiving and New Year’s — far outpaces the others.
The retail group said improved consumer confidence in the economy was “a significant factor” in the anticipated uptick in back-to-school spending this year.
“A few more families are shopping for sales or comparing prices online,” according to the federation. “But the number who say they are spending less overall is down . . . [a]nd the number who say the economy will have no effect on their plans is at . . . the highest level in the survey’s history.”
Indeed, days after releasing the back-to-school poll of 6,800 consumers by partner Prosper Insights and Analytics, the group amended its projection for full-year retail sales. Growth now is pegged at 3.4 percent over last year, up from an earlier forecast of 3.1 percent.
“We like what we’re seeing,” CEO Matthew Shay wrote in the August edition of Stores Magazine, citing growth in jobs and gross domestic product. Even a weather pattern shift from El Nino to La Nina — suggesting a cooler-than-average winter — “seems to be on our side.”
The wild card? Picking a president in November.
“Voters are often cautious around the time of change in the White House,” Shay wrote. “For the partisan, there is the worry of what will happen with the economy if the other side’s candidate should win. Even for the politically neutral, there are concerns about how the partisan will react.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]