Back-to-school spending set for first decline in nine years as inflation bites Americans: Deloitte
Last updated on: 12 July,2023 12:15 pm
Expected market size after contraction stands at $31.2bn in 2023 against $34.4bn last year
NEW YORK (Reuters) – Back-to-school spending is expected to fall for the first time in nine years as shoppers across all income levels pull back on non-essential purchases and prioritize necessities amid sticky inflation, according to a Deloitte report on Wednesday.
Consumers are expected to spend 10 per cent less this year, with average spend per child falling to $597, while the overall back-to-school market is projected to shrink to $31.2 billion, compared with $34.4 billion in 2022, the report said.
"Although parents were willing to endure higher prices last year for replenishing (back-to-school) items after the pandemic, 18 months of inflation have changed their tune," Deloitte said, citing its survey of over 1,200 parents of school-aged children.
Refreshing wardrobes and electronics for school is taking a back seat, with spending on apparel and technology set to fall 14pc and 13pc, respectively, according to the report, as Americans allocate their dollars for utmost necessities.
School supplies are expected to see a 20pc jump in spending, Deloitte said. Nearly a third of households surveyed by Deloitte were in a worse financial situation than last year, with 51pc expecting the economy to weaken over the rest of 2023.
"This back-to-school season is all about economizing. Consumers are looking to save by shopping early, searching out deals, prioritizing spend to essential school supplies ... they're on the hunt for those bargains," Stephen Rogers, executive director at Deloitte's Consumer Industry Center, said.
Deloitte's survey found nearly 60pc of all planned back-to-school purchases will be completed by the end of July, compared with 53pc a year earlier, with 69pc of shoppers also planning to rely on Amazon's Prime Day sale.
After a record season in 2022, "this year, people are like 'what is the bare minimum I need to do to get my kids out the door on those first couple weeks of school?' So (parents are) just purchasing the necessities to get that first couple weeks going," Deloitte's retail research leader Lupine Skelly said.