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How Will Shoppers Spend This Back-to-School Season?
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Back-to-school season is already upon us, and shoppers everywhere will be bombarded with advertisements and promotional offers for the next several weeks. Similar to the end of year holidays, back-to-school shopping is not only an important period for retailers, but it’s also an indication about the state of the economy.
Students need school supplies, and for this reason we know that this time of the year will always be busy, but shoppers tend to behave differently based on the amount of money they have and their own perceptions of the economy.
According to data from the National Retail Federation (NRF), parents this year feel more confident about the U.S. economy and will be spending more money this back-to-school season.
“Families are still looking for bargains, but there are signs that they are less worried about the economy than in the past,” NRF CEO Matthew Shay said. “Heading into the second half of the year, we are optimistic that overall economic growth and consumer spending will continue to improve as they did in the first two quarters of the year.”
The NRF expects families with children in grades K-12 to spend an average of $673.57 this year, up from $630.3 last year. Total spending in this category is expected to hit $27.3 billion, which is up 9.6% from last year’s $24.9 billion.
Within this category, 43% of families are shopping for sales, up from 41% last year, and 32% percent of families are comparing prices online, about one percentage point higher than last year. The NRF also noted that 27% of families said the economy will have no effect on their shopping plans this year, the highest level in the survey’s history.
The study also found that total spending by families with college students to increase to $48.5 billion from $43.1 billion last year. Average spending per family is actually expected to decrease slightly, but more families are expected to be included in this segment this year.
Families of college students are also expected to be a little less deal-oriented this year:
“Similar to K-12, 30 percent of college consumers say the economy will not affect their shopping plans, up from 26 percent and the highest level in the survey’s history. Fewer will shop for sales (29 percent, down from 35 percent in 2015), spend less overall (26 percent, down from 30 percent) or buy more generic products (25 percent, down from 28 percent),” the NRF said.
Interestingly enough, the NRF also pointed out that more families are starting their back-to-school shopping earlier this year. 73% of respondents said they’d start shopping one month to two months out from the start of school, with 63% of those blaming it on not wanting to miss sales.
Finally, the NRF said that 46% of parents said they will shop online, a he jump up from last year’s 36%. Overall, it looks like families have a little more money to spend this season, and new trends like online shopping and early deals are impacting behavior.
As always, retail kings like Wal-Mart (WMT - Free Report) , Amazon (AMZN - Free Report) and Target (TGT - Free Report) will grab headlines during this season, but investors should look out for stocks like Five Below (FIVE - Free Report) , Barnes & Noble , and Office Depot (ODP - Free Report) too.
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How Will Shoppers Spend This Back-to-School Season?
Back-to-school season is already upon us, and shoppers everywhere will be bombarded with advertisements and promotional offers for the next several weeks. Similar to the end of year holidays, back-to-school shopping is not only an important period for retailers, but it’s also an indication about the state of the economy.
Students need school supplies, and for this reason we know that this time of the year will always be busy, but shoppers tend to behave differently based on the amount of money they have and their own perceptions of the economy.
According to data from the National Retail Federation (NRF), parents this year feel more confident about the U.S. economy and will be spending more money this back-to-school season.
“Families are still looking for bargains, but there are signs that they are less worried about the economy than in the past,” NRF CEO Matthew Shay said. “Heading into the second half of the year, we are optimistic that overall economic growth and consumer spending will continue to improve as they did in the first two quarters of the year.”
The NRF expects families with children in grades K-12 to spend an average of $673.57 this year, up from $630.3 last year. Total spending in this category is expected to hit $27.3 billion, which is up 9.6% from last year’s $24.9 billion.
Within this category, 43% of families are shopping for sales, up from 41% last year, and 32% percent of families are comparing prices online, about one percentage point higher than last year. The NRF also noted that 27% of families said the economy will have no effect on their shopping plans this year, the highest level in the survey’s history.
The study also found that total spending by families with college students to increase to $48.5 billion from $43.1 billion last year. Average spending per family is actually expected to decrease slightly, but more families are expected to be included in this segment this year.
Families of college students are also expected to be a little less deal-oriented this year:
“Similar to K-12, 30 percent of college consumers say the economy will not affect their shopping plans, up from 26 percent and the highest level in the survey’s history. Fewer will shop for sales (29 percent, down from 35 percent in 2015), spend less overall (26 percent, down from 30 percent) or buy more generic products (25 percent, down from 28 percent),” the NRF said.
Interestingly enough, the NRF also pointed out that more families are starting their back-to-school shopping earlier this year. 73% of respondents said they’d start shopping one month to two months out from the start of school, with 63% of those blaming it on not wanting to miss sales.
Finally, the NRF said that 46% of parents said they will shop online, a he jump up from last year’s 36%. Overall, it looks like families have a little more money to spend this season, and new trends like online shopping and early deals are impacting behavior.
As always, retail kings like Wal-Mart (WMT - Free Report) , Amazon (AMZN - Free Report) and Target (TGT - Free Report) will grab headlines during this season, but investors should look out for stocks like Five Below (FIVE - Free Report) , Barnes & Noble , and Office Depot (ODP - Free Report) too.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>