The nation’s retailers should see a strong rebound in back-to-school and back to college sales this year over last year’s dismal results, based on research done for major retail organizations.
The International Council of Shopping Centers forecasts a 5.4 percent increase for the mid-July through mid-September period that it includes in back-to-school numbers, following a 2.8 percent decline a year ago and a 0.4 percent decline in 2008.
BIGresearch LLC of Worthington, Ohio, which works for the National Retail Federation, projects sales could rise more than 10 percent, but Phil Rist, executive vice president for strategic initiatives, is quick to add that“last year was like the end of the world.”
“For back-to-school, we’re basically seeing a return back to the 2008 level, before the Wall Street meltdown,” he said.
In the current recession, major stock indexes hit bottom in March 2009.
Combined back-to-school/ back-to-college spending is the second-biggest selling season of the year for retailers - a distant No. 2 at $55 billion in sales for the most recent year, compared to about $447 billion for Christmas, according to the National Retail Federation.
Despite the expected rise in sales, the forecasts include signs that shoppers continue to watch their budgets. BIGresearch’s survey found that discount stores remain the top destinations for shoppers.
Rist cautioned that back to school results should not be viewed as an early indicator of Christmas spending because the summer sales are driven by necessity.
“Kids outgrow their clothes and they wear out their shoes,” he said. “Back-to-school is a very much needs-driven event.”
And, he adds, only about 25 percent of the adult population have children ages 6 to 17.
Clothing and accessories top the lists of back-to-school shoppers, followed by electronics. That order is reversed for back-to-college shoppers.
Among the items Wal-Mart Stores Inc. is featuring for the season, starting today, is an Acer laptop with a 15.6-inch screen, 250-gigabyte hard drive and two gigabytes of memory, for $298, spokesman Christi Gallagher said.
Back-to-school basics priced at $1 each include a 70-sheet package of paper, markers, color pencils and pink erasers. A Texas Instruments scientific calculator is marked down from $9.38 to $8.44.
Throughout the product lineup, Gallagher said, are “a lot of unique and exclusive colors” to choose from. “The personal style is really kind of the new trend,” she said.
In areas where school uniforms are required, Wal-Mart has them priced starting at $6.
In states that have school supply sales tax holidays - Arkansas is not among them - personnel at Wal-Mart headquarters work closely with the stores to have more school-related merchandise on hand, Gallagher said. Those items include computers and clothing in addition to standard school supplies.
Missouri and Oklahoma have their tax holidays Aug. 6-8.
Gallagher said back to school also is a busy time for vision centers at the company’s stores. It’s not unusual, she said, for parents to discover their child can’t read what’s on the blackboard.
Back-to-college items at Wal-Mart include $7 vinyl shower curtains and sheet sets, a $15 vacuum cleaner and a $58 mini-refrigerator.
Target Corp. back-to-school deals featured last week included $9 Dora the Explorer backpacks, $6 insulated lunch kits and $1 notebooks. For the college crowd, the retailer advertised $4.25 bath towels, $9.99 twin sheet sets, an Epson printer-copier-scanner for $29.99 and an Emerson minirefrigerator with dry-erase door for $89.
Kmart features included character backpacks and minibackpacks for $8, Route 66 young men’s jeans for $9.99 and a Coexist by Cannon futon for $99.99.
Patricia Edwards, a retail analyst who runs Storehouse Partners LLC in Seattle, was not buying into the upbeat outlook for retailers as school and college start dates approach. The prices of materials such as cotton for apparel are going up, as are labor costs in China where many products are sourced, which will squeeze retailers’ margins, she said.
On the domestic front, she said, the job outlook shows little signs of improvement. Jobs that normally would go to teens are often taken by adults.
“Adults are finding that pizza delivery, while not their favorite thing to do, at least will help keep food on the table,” she said.
Edwards said she’s finding little new in teen fashion to help drive sales. She expects Target and Wal-Mart to pick up some apparel sales as shoppers trade down. Other discount apparel stores such as TJ Maxx, Ross Dress for Less and Aeropostale also are likely to fare well, she said.
The one bright spot, she said, is electronics.
“People are still buying the gadgets,” she said.
A recent survey by online shopping site PriceGrabber.com found that 15 percent of respondents intend to buy new laptops for their elementary students, up from 7 percent a year ago. The survey also found that 10 percent in that age group would get a new cell phone or smart phone,up from 7 percent.
PriceGrabber is part of Experian, a Dublin, Ireland-based information services company that provides data and analysis to companies around the world.
Business, Pages 69 on 07/25/2010