2010 BTS outlook brighter than ‘09

After a slow start to the second quarter, things are looking up for Target this month and next due to a favorable outlook for back-to-school season coupled with the fact that the discount channel is a preferred shopping outlet.

The International Council of Shopping Centers is forecasting a 5.4% increase in back-to-school spending over the prior year when sales dropped 2.8% on top of a 0.4% drop the prior year. A survey by the National Retail Federation forecast back-to-school spending for the average family would increase roughly 10% to $606 compared to $548 last year.

“We are encouraged by the fact that parents are eager to start their back-to-school shopping this year, but the industry still remains cautiously optimistic about recovery,” said NRF President and CEO Matt Shay. “As the second half of the year gets under way, retailers will gauge their customers’ spending appetites, which often serve as a bellwether for the all-important holiday season.”

While Americans may be spending more this back-to-school season, what they intend to purchase says a great deal about the current state of the economy. NRF found that 44.3% of Americans will buy more store brand or generic products, compared with 41.7% last year. Additionally, more parents will comparison shop online (30.3% vs. 26.4% in 2009).