Economy impacts back-to-school spending plans

Wash. According to the National Retail Federation’s 2009 Back to School Consumer Intentions and Actions Survey, the average family with students in grades Kindergarten through 12 is expected to spend $548.72 on school merchandise, a decline of 7.7% from $594.24 in 2008. Total spending on back to school is expected to reach $17.42 billion. 2009 back-to-college and back-to-school spending combined will total $47.50 billion.

The economy is having a major impact on back-to-school spending, as four out of five Americans have made some changes to back-to-school plans this year as a result. Some of those changes impact spending, with 56.2% of back-to-school shoppers hunting for sales more often, 49.6% planning to spend less overall, 41.7% purchasing more store brand/generic products and 40% are planning to increase their use of coupons. Others say the economy has impacted lifestyle decisions, with 11.4% saying children will cut back on extracurricular activities or sports and 5.7% saying that the economy is impacting whether their children will attend a private or public school.

“The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers,” said Tracy Mullin, President and CEO of NRF. “As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shoppers this year.”

However, one back-to-school category expected to increase is electronics. With personal laptops and desktop computers increasingly affordable for most families, spending on electronics and computer equipment is expected to increase 11%. The average family plans to spend $167.84 on those purchases, compared to $151.61 last year. Families will also spend an average of $204.67 on clothing and accessories, $93.59 on shoes and $82.62 on school supplies.

The number of people planning to buy school items at drug stores is expected to rise substantially. Nearly a quarter of families will shop at drug stores for back–to-school, an 18% increase over last year’s 18.2%. Drug stores have become more popular recently as their merchandise mix has broadened beyond health and beauty products to include school supplies, small electronics and groceries.

More than half of back-to-school shoppers will also head to department stores, nearly half will shop at a clothing store and 41.2% will visit office supply stores. 22.2% will shop online, 20.8% will shop at electronics stores and 18.2% will shop at a thrift store.

The majority of Americans will begin their shopping three weeks to one month before school starts, trying to take advantage of retailers’ early promotions and spend over time. An additional 31.8% will shop one to two weeks before school starts and 2.5% will shop after school starts, hoping to take advantage of clearance sales and postpone purchases as long as possible.