Back-to-school is the second-biggest buying season of the year. But with uncertainty over how (or if) classrooms will open this fall, analysts disagree on whether the late summer will be a boom or bust for retailers.
On the boom side is a report issued this week by the National Retail Federation and Prosper Insights & Analytics. The NRF predicts an all-time high in back-to-school spending, fueled by the need to equip for at-home learning.
Based on a survey of 7,481 consumers conducted from July 1-8, the NRF/Prosper report says K-12 spending will average $789.49 per family, topping the previous record of $696.70. The NRF expects the overall K-12 spend to reach an all-time record of $33.9 billion (up nearly 30% over 2019’s $26.2 billion).
Projections are even higher for college students: $1,059.20 per family (vs. $976.78 in 2019) and $67.7 billion overall — shattering the 2018 record of $55.3 billion.
Total spending (for K-12 and college combined) is expected to reach a record $101.6 billion. That would blow past last year’s $80.7 billion and top the $100 billion mark for the first time.
According to the NRF, families will spend to prepare for part- or full-time at-home learning. A majority of those surveyed expect at least some classes to involve distance learning. Of those expecting students to be at home, more than 70% expect to spend on computers, home furnishings or other supplies for distance learning. Thirty-six percent expect to buy laptops, 22% computer speakers/headphones, 21% other accessories such as a mouse or flash drive, and 17% printers. Other expected expenses include calculators, furniture and workbooks.
While other analysts agree that parents and students are anxious about the upcoming school year and want to prepare for at-home learning, not everyone sees this as a retail windfall.
“Back-to-school should be a dud,” Wedbush Securities managing director Michael Pachter told Market Watch this week. “While I agree [with the NRF] that more kids are going to need PCs to continue with remote learning… the uptick in demand from those households who don’t have a PC will be offset by those households with one or more parents laid off or unemployed because of the pandemic.”
Reporting on a Deloitte survey from May 29-June 5, CNBC found that uncertainty could delay and depress back-to-school spending. “As many families wait to hear more about what learning will look like,” she says, “analysts expect the back-to-school buying binge will occur later in the season, if at all.”
Deloitte projects spending to top out at $28.1 billion ($529 per student), which is “about flat compared with last year,” Thomas says. “It is just the categories that parents are spending on that are shifting — with electronics seemingly taking a much greater share of wallet.”
Deloitte expects other traditional fall items to take a hit, with apparel spending falling 17% and notebooks, backpacks and other traditional supplies dipping 18%.
Stacey Widlitz, president of SW Retail Advisors, told CNBC that “parents are just not going to open their wallets until they know” whether students will be able to enter classrooms this fall — which may have a carryover to the holiday season.
“If back-to-school isn’t good, everyone is going to start looking at their neighbors to see how they’re doing,” Widlitz added. “I think parents are going to be spending money in a lot of different ways this year.”