You don’t have to get straight As in math to calculate that back-to-school shopping costs more than it did last year. With inflation at a 40-year high of 9.1%, the price of backpacks, supplies, clothing, and electronics are up, with 42% of moms and dads expected to borrow money to pay the tab.
Only about a third—36%--of parents say they can afford back-to-school purchases, according to a recent Morning Consult survey. Last year, more than half felt confident they could handle the bills.
A survey by Credit Karma is even more pessimistic, with 42% of parents planning to pull out their plastic and assume debt to pay for school shopping.
Call it a lesson in addition and subtraction. While prices are rising, many parents have less money in their bank accounts. There are no COVID pandemic stimulus checks in the mail. And the enhanced Child Tax Credit, which was boosted from $2,000 to $3,600 for each child under age 6, lapsed in December.
“Now, these savings are being depleted as the burden of inflation gets heavier,” Claire Tassin, Morning Consult analyst, said in a statement.
Tanya Duelfer of North Wilmington is reminded of how much basic expenses have grown every time she fills the gas tank on the minivan she waited two years to buy.
“We buy the van and the very next week gas prices start rising. The sticker shock of going from $40 to fill a tank to $100,” she says.
Consumers, already weary from COVID-induced shortages and breaks in the supply chain, are bombarded daily with reminders that the buying power of their dollars is shrinking. The tab for rice rose 11.9% in June, according to the Consumer Price Index. Frozen vegetables cost 9.8% more. Poultry prices took flight, up 17.3% Need a new fridge? Expect to pay 24% more than before the pandemic.
To tap the brakes on spending, Duelfer shops wisely. The cost of uniforms for her kids is about $700 a year, so she buys them in July, taking advantage of an annual sale.
Many parents who want to save on clothes are thrifting, buying gently used garments at resale shops. Many Goodwill stores have set up designated back-to-school shopping sections, including racks devoted to uniforms, says Colleen Morrone, CEO.
“The cool thing about all of our displays is that they change often because everything on display is available for purchase. We’ve already begun setting up for back-to-school and our team members are there to help parents, guardians and students assemble fashion-forward back-to-school essentials at affordable prices,” she says.
Predictions of how much shoppers will spend varies widely among pollsters.
According to a Deloitte survey, the average amount spent per child will increase 8% to $661 from last year—and up a whopping 27% from 2019, the last back-to-school season before the COVID pandemic closed many schools. Additionally, 60% of parents say they're spending more not because they are buying additional goods but because prices are higher.
The National Retail Federation, a Washington, D.C.-based retail trade group, estimates U.S. shoppers will spend $37 billion this back-to-school season. That’s on a par with last year’s record spending, with households averaging $864. Expenditures for college students are higher, including such staples as bed linens, laundry baskets, mini fridges and coffee pots for all-nighters, in addition to pricey items as laptops. Spending for college students is expected to average about $1,200, which is consistent with last year.
Even though kids are expected to be back at their desks, electronics will still command a big chunk of most budgets, especially for college students. Projected spending is $18.5 billion, an average of $299.96 per child, the NRF says.
Last year, when consumers were flush with government payouts, expenditures were robust across the board. This year’s spending reflects a divide between the haves and the have-nots. Higher-income households are propelling sales, with affluent moms and dads spending 32% more on back-to-school purchases than in 2021, says a report by commercial real-estate services firm JLL.
With the stimulus checks gone, where are lower- and middle-income families finding the money to buy notebooks and gym suits? The JLL survey says families whose incomes are significantly dinged by inflation plan to spend 15% less than last year on back-to-school shopping. Households who feel slightly squeezed will cut back less, roughly 6%, according to JLL.
“Consumers are cutting back on spending in other areas, working additional hours and taking other measures to cover costs for back-to-class shopping this season."Mark Mathews, NRF analyst
That sentiment is reflected in shoe sales. While 82% of consumers in households earning more than $50,000 plan to buy shoes, only 72% of households making less than $50,000 will purchase footwear, according to the NRF. Lower-income households will buy cheaper shoes, paying an average of $11.82 less than last year, while upper middle-class households will spend about $11 more for every pair of school shoes they buy.
The NRF says about 40% of parents have been spending less in other areas to free up funds for back-to-school purchases. That means fewer families will go out for burgers after a day of shopping. Dad is mowing the lawn instead of hiring a landscaping service. The stay-at-home mom is taking a part-time job.
“Consumers are cutting back on spending in other areas, working additional hours and taking other measures to cover costs for back-to-class shopping this season,” says Mark Mathews, an NRF analyst.
For retailers, back-to-school is an essential season, second in sales to only the winter holidays. Households with children spend more for school shopping than they do on Mother’s Day, Father’s Day and Valentine’s Day combined. Matthews noted that school shopping focuses on necessities, the most-protected retail sector. Whether consumers will part with discretionary dollars for the winter holidays remains to be seen.
Retailers are attracting back-to-school customers with deals, although most of the bargains are on items at the lower-end of the price scale. Here are a few doorbusters:
- At Staples, school supplies starting at 50 cents, plus 3M office supplies are marked down as much as 50%.
- Target’s prices on school supplies start at 25 cents. Apparel, backpacks and shoes, are marked down, too. College dorm essentials start at $4.
- At Walmart, deals include a 24-pack of crayons for 50 cents, a 70-page notebook for 35 cents and a four-pack of Sharpie highlighters for $2.77.
Both Target and Bed Bath and Beyond are offering discounts of 15-20% to college students and teachers.
