CGP forecasts ‘phenomenal’ increase in back-to-school sales
Retailers can expect “warp-speed” growth in back-to-school sales this year, fueled by the stimulus, consumer resilience and pent-up demand.
That’s according to the 19th annual Back-To-School Forecast from Customer Growth Partners, a research and consulting firm serving the retail industry, which predicted a 16% year-over-year increase in sales for the July-to-September back-to-school season. Sales are expected to hit a record $780 billion. (The forecast spans all retail sales except autos, gasoline, restaurants, food & beverage and home improvement.)
For the first time in decades, apparel and accessories back-to-school sales will outpace other merchandise sectors, with 46% growth from 2020. Sporting goods, toy and hobby retailers will also thrive, up 21% year-over-year as millions of once hunkered-down households return to normal recreation patters, according to the the report.
Also, department stores will see their best back-to-school growth in years, with sales up 12% (although still far lagging their total sales from earlier this century, the report noted.)
“After almost a year of hunkering down, consumers are back in the stores in numbers we haven’t seen since 2019—if then,” said Craig Johnson, president, Customer Growth Partners. “With back-to-school shopping about to kick-off, consumers are flush with cash from a year of record savings, rising wages—and government stimulus—and are ready to unleash a full year of pent-up demand.”
On a two-year basis, Johnson added, the retail recovery is even more surprising, with back-to-school spending up 25% from 2019’s $624 billion pace—itself a record at the time.
“We’ve never seen retail back-to-school growth this vigorous this century, and perhaps not since the post-war period of the early 1950s,” he said. “Still, this year’s exceptional back-to-school growth may be the ‘high water’ mark of the recovery, as consumer demand rotates back to services from goods, as the hospitality, travel and entertainment sectors recapture share-of-wallet from retailers.”
Customer Growth Partners anticipates that year-over-year sales growth will ease this fall, as comparisons become more challenging and as services spending recover. Labor shortages, supply chain bottlenecks and consumer resistance to rising prices may also pressure sales for the second half of 2021. Another great uncertainty is COVID-19.
“The past year has provided a unique window into the resilience of the American consumer, the resourcefulness of American retailers—and the underlying strength of the American economy at large,” Johnson said. “Retail growth may slow a bit as we lap 2020’s fourth quarter, but we will still see record holiday spending, and with COVID mostly under control and the economy humming along, we should have a lot to be grateful for.”
CGP is a research and consulting firm serving the Retail industry. Founded in 2001, CGP has conducted proprietary and public forecasts of Annual, BTS and Holiday Retail sales ever since. CGP President Craig Johnson has over 35 years of experience in market research and demand forecasting, has spoken worldwide on economic topics, and appears often in the electronic and print media. CGP’s 18-member field team conducts primary research weekly in over 100 major shopping venues nationwide.