Kudos to the Great American Consumer as the nation’s kids gear up for the first day of school.
It’s one thing to curtail spending on family vacations, new cars, or even for steaks to throw on the grill. But Americans just aren’t having it when it comes to back-to-school shopping.
With school bells ready to ring next month, parents are making clear that sharp inflation won’t stop them from spending the funds necessary to get their kids ready for the new school year.
According to a new study by Deloitte, back-to-school shopping activity is on track for record spending, with families spending up to $34.4 billion for K-12 students or about $660 per student.
Meanwhile, back-to-college spending is expected to crest at $28.3 billion, or about $1,600 per collegian.
“That’s the case as more than half (57%) of back-to-school shoppers surveyed are concerned about inflation, though many remain determined to purchase needed supplies, possibly driving spending per student up by as much as 8%,” Deloitte reported.
After two years of disruptions spurred by the covid-19 pandemic, parents are also ready for a more normal shopping approach to the coming school year, the report noted.
“Even as economic and inflationary pressures sit top of mind, parents seem resilient and determined to ensure their children get the school supplies needed to succeed this coming year,” said Nick Handrinos, U.S. leader for retail, wholesale, distribution, and consumer products at Deloitte LLP.
“Retailers that remain conscious of this determination, while being mindful to address shoppers’ ongoing economic concerns, could earn trust and position themselves strongly.”
Parents Cut Back on Other Household SpendingA separate study from the National Retail Federation and Prosper Insights & Analytics showed that U.S. families are balancing the need for back-to-school supplies and inflation realities by chopping the household budget in other areas.
“Families consider back-to-school and college items as an essential category, and they are taking whatever steps they can, including cutting back on discretionary spending, shopping sales, and buying store- or off-brand items, in order to purchase what they need for the upcoming school year,” said Matthew Shay, president and CEO at the NRF.
“The back-to-school season is among the most significant shopping events for consumers and retailers alike, second only to the winter holiday season.”
Just as they do during the winter holidays, shoppers are starting early to find the best deals and help spread out their budgets. As of early July, more than half (56%) of shoppers had started shopping for school and college supplies, the NRF reported.
Retailers are more than happy to cooperate, with many stores expanding their back-to-school timetables to better accommodate high-spending but choosy parents.
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“We’re seeing real shifts in the way people are shopping and spending on back-to-class items since before the pandemic,” said Phil Rist, vice president of strategy at Prosper Insights,
“As a result, retailers are also shifting by bringing in inventory earlier and extending back-to-class offerings.”
There’s no shortage of ways that U.S. families on a tight budget can save on school spending, and still get good value.
“There’s no doubt that people are going to shop around and look for discounts and bargains wherever they can,” said Matt Schulz, chief credit analyst at Lending Tree.
“This should be easier now with brick-and-mortar stores mostly back in full swing, but the truth is that people are going to need to adjust their expectations and their budgets. That’s because even the stuff in the bargain bin is still probably going to be more expensive than it was a year ago.”
Before you hit the stores and digital shopping platforms, it’s a good idea to communicate with your family about any budget issues.
“You don’t have to open up your books and bore them with an economics lesson,” Schulz told TheStreet. “Just share with them that many things you buy have gotten more expensive these days and that the family might have to make some sacrifices in order to afford everything the kids will need for school.”
For example, mom or dad can ask the kids about their biggest priorities and then adjust back-to-school spending accordingly.
“Maybe they’re big on having a cool backpack but don’t care at all about lunch boxes,” Schulz noted. “Getting them involved in the decision-making can take some of the sting out of the tight budget issue.”
Schulz offers these back-to-school shopping tips, as well.
Don’t be afraid to reuse things. Not everything has to be replaced every year. “If your kid can get another year out of an item, give it a go,” he said.
Hand-me-downs can help. Whether they’re from a big brother or sister or from friends and family who’ve outgrown them, hand-me-down items can save parents money “It’s not just about clothes,” Schulz added. “Think lunch boxes, backpacks, notebooks, and so on. If they’re still in good condition, don’t be afraid to put them to good use.”
Credit card rewards can help you extend your budget. With inflation rising, that 1% or 2% cash back can be meaningful to folks, while card signup bonuses can be really helpful, too.
“Many cards will offer $100 or more back for spending $500 to $1,000 in the first few months with the card,” Schulz said. “If you’ve already got cash saved up to help you with back-to-school spending, make the purchases with your credit card and then use that savings to pay off your credit card bill quickly.”
“That way, you can take advantage of that great signup bonus without risking going into debt,” he added.