Though inflation persists and families are spending more time and money on traveling, Americans are still expected to spend in record levels for back-to-school this year, at least according to the National Retail Federation.
The NRF, in conjunction with Prosper Insights & Analytics, on Thursday released findings from their annual BTS survey, indicating that spending for students in grades kindergarten through high school is expected to reach an “unparalleled” $41.5 billion — up 12.5 percent from $36.9 billion last year. The previous high was $37.1 billion in 2021, NRF said.
The survey also concludes that back-to-college spending is expected to hit $94 billion, about $20 billion — 27 percent more — than last year’s record $74 billion.
“Back-to-class shopping is one of the most important consumer shopping occasions of the year. Our research for 2023 shows American consumers are eager to jump-start their back-to-school and college purchases early,” NRF president and chief executive officer Matthew Shay said in a statement. “Retailers have been preparing for months to ensure they are well stocked with essential items that families and students need for the school year.”
But Deloitte, based on its survey of 1,212 adults with kids in grades ranging from kindergarten to 12th grade, projects that the average spend per child would decrease 10 percent to $597 versus the $661 spent in 2022. Sixty-eight percent of those surveyed by Deloitte indicated they would spend the same or less than a year ago, though overall, all income levels plan to spend less.
Deloitte attributed that lower spending to reduced disposable income and increased prices. “However, 57 percent of those surveyed said they are willing to splurge on clothing/accessories and 56 percent of those surveyed would spend more on tech items for their children,” Deloitte reported.
Overall, Deloitte projects that the BTS market encompassing spending on kindergarten to 12th graders would come in at $31.2 billion, down 9 percent year-over-year and lower than NRF’s projection.
But it’s important to note that different surveys have different methodologies, leading to varying findings.
As a spokeswoman for the NRF explained, “NRF’s survey represents a more comprehensive set of 7,843 back-to-class shoppers including back-to-school parents, back-to-college parents and college students themselves, whereas Deloitte’s survey captures 1,212 parents with at least one child attending school in grades K-12 this fall. This year, NRF’s data shows the most significant growth comes from the college segment.
“In addition, Deloitte looks at spend per child while NRF looks at how much parents are spending overall. NRF’s large sample size also means we cover a broader set of Americans and are a little less prone to sample fluctuations.”
Not be overlooked is the KPMG 2023 Consumer Back to School survey of nearly 600 U.S. households with students. That survey indicated that respondents expect to spend $377 per child this year, a 21 percent increase from 2022.
KPMG indicated that more than 40 percent of BTS shoppers say they are in a worse financial situation compared to a year ago, while 32 percent report feeling they are better financially. More than 60 percent of respondents said they are concerned about inflation with 82 percent expecting to spend more per student in 2023 due to rising prices.
Also, Craig Johnson, president of the Customer Growth Partners research and consulting firm, said he expects sales to be up 3.7 percent. “That’s OK, not great. People are much more considered in their purchases,” said Johnson.
Each year since 2003 the NRF has conducted a survey on back-to-class shopping trends. Its survey has a margin of error of plus or minus 1.1 percentage points.
Back-to-school shopping typically peaks in mid- to late July and continues steady through August until tapering off by mid-September.
According to the NRF: “Shopping in preparation for the first day of school is already well underway. As of early July, 55 percent of consumers who are buying for back-to-class said they have already started shopping. This is on par with last year, but is up from 44 percent in 2019, and is in line with the trend of consumers shopping earlier for major spending events. While consumers have started shopping early, as of early July, 85 percent said they still have at least half of their shopping left to do.”
KPMG’s research also cited early back-to-school shopping this year.
In other BTS projections by NRF/Prosper, families with children in elementary through high school plan to spend an average of $890.07 on back-to-school items this year, about $25 more than last year’s record of $864.35, and a new high. This increase in spending would be primarily driven by more demand for electronics.
“Sixty-nine percent of BTS shoppers expect to buy electronics or other computer-related accessories this year, up from 65 percent last year and the highest in the survey’s history,” the NRF indicated. “Total spending on electronics is expected to reach a record $15.2 billion. As in past years, the top electronics consumers plan to purchase are laptops (51 percent), tablets (36 percent) and calculators (29 percent).”
College students and their families are expected to spend an average of $1,366.95 per person, up from $1,199.43 last year, and a new record from the previous high of $1,200.32 in 2021, the NRF indicated. Since 2019, back-to-college spending has nearly doubled.
Forty-three percent of those who are spending more than last year say it is because they need more new items, up significantly from 32 percent last year. Thirty-two percent of those surveyed attribute that to needing more big-ticket items such as computers, phones, calculators or dorm furnishings. “Spending on big-ticket items such as electronics and furnishings as well as necessities like food accounts for more than half of the increase in total back-to-college spending this year,” the NRF indicated.
The retail trade organization also indicated that the top destinations for BTS shopping are online, department stores and discount stores.
“Even though consumers plan to spend more on school and college-related items this year, they are still looking to find the best value and deals,” Prosper executive vice president of strategy Phil Rist said in a statement. “Consumers are stretching their dollars by comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than last year.”
Prosper Insights & Analytics provides consumer intent and future behavior data serving the financial services, marketing technology, and retail industries.
On July 24, NRF’s chief economist Jack Kleinhenz and NRF’s vice president of industry and consumer insights Katherine Cullen will further discuss the season and the trade group’s latest data on the BTS season.
This story was reported by WWD and originally appeared on WWD.com.
