Down to Business: Retailers on edge heading into back-to-school shopping season

PHOTOGRAPHER:

I’ve got to believe many retailers will go through the 2022 back-to-school shopping season with their fingers crossed.

The period, from roughly now to Labor Day, traditionally is the year’s second-biggest spending event in retail, according to the National Retail Federation. The winter holidays, bookended by Thanksgiving and New Year’s, are No. 1.

This year, though, consumers already are having to dig deeper for necessities like food and fuel due to the highest inflation in 40 years, which could dampen back-to-school sales.

Retail forecaster Customer Growth Partners predicts spending will slow from 2021’s pace – 5.5% this year versus 13.1% last year – and much of the 2022 increase will be attributable to price inflation, its president, Craig Johnson, told the trade publication Chain Store Age.

Johnson’s overall assessment for the season: solid but not stellar.

A bit more optimistic is the Mastercard SpendingPulse measure of in-store and online retail sales across all forms of payment. It expects back-to-school sales will grow 7.5% over 2021, with an adviser to the company, who formerly headed an upscale department store chain, urging retailers to find “innovative ways to entice shoppers,” since discretionary spending is being stretched thin by inflation.

While the National Retail Federation’s annual back-to-school predictions won’t be out until next week, the group indicated the consumer survey at the root of its outlook shows that shoppers are changing some behaviors to meet the higher prices they expect to see.

Compared with last year, a greater number of consumers will comparative-shop online, opt for store brand/generic products, and use coupons more, according to the group. And compared with pre-pandemic 2019, many more consumers this year will plan their back-to-school shopping around retailer sales events.

National discounter Target jumped on that bandwagon last week, announcing earlier back-to-school bargains and new savings for teachers and college students. Walmart did the same, promising more than 100 of the top school supplies at less than $1.

Meantime, Target’s online-only “Deal Days” sales event this week — its answer to Amazon’s Prime Day sale — fell into the earlier back-to-school period and also featured school supplies and back-to-college items. Walmart chose not to hold its own Prime Day rival event this year, instead touting price “rollbacks” on thousands of items, the cable business channel CNBC said.

Target, Walmart and other retailers earlier reported unexpectedly high inventory levels when posting fiscal first-quarter results, a miss attributed to orders not lining up with demand due to shipping holdups and shifting consumer tastes.

That could mean additional discounts for shoppers through deal days, rollbacks or even back-to-school sales, but won’t do much for those retailers’ crossed fingers.

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].

  

Categories: Business, Opinion

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