Families Tighten Budgets for Back-to-School Shopping Season
As summer begins to wind down, millions of American families ready their children for the upcoming school year. For parents, it can elicit an array of emotions. Some may shed a few tears as their children hop aboard the local school bus. Others, however, may rejoice and break into song, shouting the words to George Michael’s hit song “Freedom!”. To each their own.
But the back-to-school season also carries substantial economic weight. It is one of the retail industry’s largest shopping events. The annual shopping extravaganza encompasses both back-to-school spending (for kids in grades K-12) as well as back-to-college spending. It is second only to the November-December holiday shopping season which totaled a massive $964.4 billion in sales in 2023.
This season, 34% of all U.S. adults are expected to stock up on clothing, supplies and other essentials for the upcoming school and college year. But concern over a cloudy economic outlook has many Americans tightening up their pocketbooks. This year, the National Retail Federation (NRF) expects U.S. consumers to spend $38.8 billion on back-to-school shopping for their K-12 children. This is down 6.5% from last year’s total of $41.5 billion. Likewise, back-to-college spending is expected to reach $86.6 billion, down 7.9% from last year.
According to the NRF, on average, each family is expected to spend $874.68 on back-to-school items for their K-12 children. Among their top purchases, shoppers will spend an average $309.35 on electronics, $253.29 for clothing & accessories, $141.62 for school supplies and $170.43 for shoes.
College students and their families are expected to spend even more ($1,364.75) for the upcoming school year. On average, back-to-college shoppers will spend $359.49 on electronics, $192.40 on dorm or apartment furnishings, $171.06 on clothing & accessories and $112.60 on shoes. Surprisingly, funding for “beer” wasn’t included in the NRF’s back-to-college spending analysis.
One of the main trends this season is consumers getting an early start for their back-to-school shopping needs. According to the NRF, more than 55% of back-to-school shoppers started their shopping in early July. 25% say they started shopping in early June. Among those early shoppers, 65% state it helps them spread out their back-to-school spending.
Shopping early also allows budget-conscious consumers to seek out the best deals. 85% of back-to-school shoppers took advantage of Prime Day, the national two-day shopping blitz that offers consumers significant online discounts and promotions. This year’s Prime Day was held on July 16-17. According to Adobe Analytics, U.S. retailers reported a record-high $14.2 billion in online sales during these 48 hours, up 11.8% from last year. The strong pace of sales was led by school-related items. Adobe Analytics reports spending on backpacks, lunchboxes, stationery and other supplies increased 216% compared to last year’s Prime Day event. Likewise, spending on kid’s apparel rose 165%.
If you haven’t started your back-to-school shopping yet, there are still many sales and discounts to be had. But try and stick to your budget. Remember, the November-December holiday shopping season is right around the corner.
Mark M. Grywacheski, Investment Advisor
Quad Cities Investment Group is a Registered Investment Adviser.
This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Quad Cities Investment Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Quad Cities Investment Group unless a client service agreement is in place.
