Retailers already gearing up for back-to-school shoppers; expect to see increase in business
Reposted from The Plain Dealer | By Janet Cho
CLEVELAND, Ohio — The red, white and blue Fourth of July decorations and party goods have been sent to the clearance rack to make way for the next big retail season: back to school.
At the Target Store in Steelyard Commons shopping center Wednesday, tucked behind the patio furniture and other signs of summer, were brightly colored displays of Crayola Crayons, Barbie backpacks and Spongebob SquarePants lunchbags — all ready for eager parents and somewhat-less-than-eager schoolchildren.
Even if some shoppers aren't ready to give up their sunglasses and flip-flops, retailers have already plunged into their second most important shopping season.
The period from mid-July to mid-September generates 16.1 percent of retailers' annual sales, compared to 28.1 percent for the Christmas and December holidays, according to the International Council of Shopping Centers in New York.
Americans will collectively shell out $39 billion for back-to-school clothes, shoes, electronics, books and other supplies, about 3 percent more than last year.
That's slightly smaller than last year's 5 percent increase from 2009, but still stronger than before the recession.
It also reflects the fact that while unemployment is down and consumer confidence is up, take-home pay is slightly lower and cotton prices are higher than they were this time last year.
But retail experts caution against expecting too much of still-wary consumers who might still have credit card bills to pay.
"It's going to be a tough back-to-school season," said consumer behavior expert C. Britt Beemer, founder and chairman of America's Research Group in Charleston, S.C.
"Consumers are still trying to spend as little as they can and buying only what they have to buy," he said.
"Some parents are going to wait until the last possible minute in case their children grow, so their clothes can last as long as possible during the school year."
Just because retailers are feeling more optimistic doesn't mean that consumers are, said Sherry Jarrell, finance and economics professor at Wake Forest University in Winston-Salem, N.C.
"Home values, an important factor in how a family perceives their personal wealth, are at historic lows. The average U.S. family just doesn't feel as wealthy as it once did," she said. "There still is this spector of 'I may become unemployed,' or 'There may be another recession,' or 'I don't have the buying power that I used to.'
"I don't remember my neighbors being quite so pessimistic and so risk-averse as I've seen them over the last several months. . . Add to this persistent high levels of unemployment and fears of unemployment, and it's unlikely parents will loosen their belts for extra items or expensive brands."
A recent PriceGrabber.com survey of 2,612 consumers found that fewer shoppers expect to spend $250 or more on back-to-school, 48 percent this year versus 56 percent last year.
Moreover, 55 percent of shoppers said they plan to both spread out their purchases over a longer time period rather than buy it all now.
Yet even among cautious consumers, "there are certain things you have to have when you're sending students to school, whether it's 1st grade or college," said Jack Taylor, professor of retail at Birmingham-Southern College in Birmingham, Ala. For example, "many of my students get new computers before they come to school or right after they start."
Although back-to-school spending used to give retailers an early snapshot of Christmas spending, and whether consumers were hunting for bargains or willing to splurge, experts say that won't be as true this year.
"You have to have certain supplies to go to school, but you don't have to have certain Christmas presents, so it's more discretionary," Taylor said.
Jarrell agreed, saying tough economic times can lead to permanent changes in purchasing behavior. "The old back-to-school buying barometer is less predictable than ever," she said.
Even though retailers' shelves may be packed with the hottest trends and fashions for back-to-school, "I think they know full well that there is a high probability that they're going to have to cut those prices to get those products out the door."
At the Rainbow Kids store at Forest Hill Plaza in East Cleveland, store managers Dolores Bush and Tenia Plummer used price guns to mark down already-reduced tags on summer clothes they need to clear out for more school uniforms.
Blue, white, navy and khaki outfits, in sizes 4 to 20 Husky, are lined up along one back wall but the selection will expand in coming weeks.
"I had one lady in here yesterday buy a couple pairs of pants, shirts and underwear for her daughter," Plummer said.
"When she comes back, we'll have more jumpers, shirts and skirts out. It'll take up just about the back half of the store."
Back to school … by the numbers
2: Rank of back to school as a shopping season (the Christmas holidays are No. 1)
77 million: Number of children and adults attending school
$39 billion: Amount consumers are expected to spend on back-to-school items this year
11 percent: Shoppers who will buy a new cellphone or smartphone
16.1 percent: Share of retailers' annual sales that comes from back-to-school shopping
18 percent: Shoppers who will buy a new laptop
25 percent: Share of shoppers who plan to spend $500 or more
47 percent: Shoppers who will buy a new backpack or tote bag
48 percent: Share of shoppers surveyed who plan to spend $250 or more
52 percent: Share of shoppers who plan to spend as much as they did last year
75 percent: Shoppers who will buy new clothes
79 percent: Shoppers who will buy school supplies like notebooks, binders and pencils
SOURCES: International Council of Shopping Centers, U.S. Census Bureau, PriceGrabber.com