Is inflation the biggest back-to-school story?

August 15, 2022

Deloitte, KPMG and MasterCard all released “Gold Star” back-to-school spending forecasts in the 7.5% to 9% range, attributing the increased spending in part to inflation.

The KPMG survey found that among respondents planning to spend more per child, expecting things to cost more was the top reason, cited by 39%.

The widespread return of classrooms in 2022 is expected to revive categories related to social interaction, such as footwear and apparel, as well as traditional supplies.

The return of the National Retail Federation (NRF) investigation was an outlier, predicting flat back-to-school spending from record spending the previous year. NRF found that, compared to 2019, back-to-school expenses have increased “significantly” as families adapt to changes in virtual and blended learning.

Whether blended learning will changeschool expenses in the future will be closely watched as mall schools are still deploying digital content.

Supply chain disruption could once again become a frustrating factor for back-to-school shoppers. In Deloitte’s survey, 63% of respondents said they expected back-to-school stockouts.

Inflation, however, was the main subject explored in the surveys carried out in June and July.

NRF’s analysis found that among back-to-school items, the largest price increase from 2019 to 2022 was seen in stationery (up 21.8%), followed by furniture and bedding. (up 21.1%) and footwear (up 9.9%).

NRF has found that the start of the school year remains a “essential category,” with 38% of parents reducing spending in other areas to cover the cost of items for the upcoming school year.

A The bank rate survey concluded that the primary way back-to-school shoppers plan to make up for the higher costs was by looking for more couponsdiscounts and sales (54%), buying fewer school items such as supplies, clothes, etc. (43%), buying cheaper brands (43%) and stretching the items they currently have for another year (39%).

Surveys have shown that some parents expect more deals this year due to high inventories in many stores.

Scott Rankin, National Advisory and Strategy Leader, Consumer & Retail, KPMG LLP said: “The jury is still out on where retail prices will be for back-to-school merchandise. Although consumers expect net prices to increase, they also believe there will be more competition for their money, potentially increasing promotional activity. »

DISCUSSION QUESTIONS: Do you agree that back to school is largely an “essential category” and somewhat immune to inflationary pressures? Are promotional activities, in-person classes or stock-outs likely to be a bigger factor influencing back to school?

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“As companies face profitability pressures such as inflation, expect higher promotional spending.”

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Norma A. Roth