• by Sarah Mahoney  @mahoney_sarah, July 23, 2024

 
Walmart's back-to-school styles

Uncertainty is hard for all consumers but perhaps rougher for parents. While the overall economic picture for families is stable and growing, the National Retail Federation is predicting a 7% decrease in back-to-school spending this year compared to its forecast in 2023.

It expects back-to-school spending on students in grades K through 12 to total $39 billion, compared to a record $41.5 billion forecast last year. And back-to-college shoppers, who seem somewhat less inclined to be hunting for bargains, are likely to spend $87 billion, down from $94 billion. Combined, that amounts to $135 billion, a dip of 7% compared to 2023.

That is a per-student amount of $875 on clothing, shoes, school supplies and electronics for kids in K through 12 and $1,365 for back-to-college students, who are also stocking up on dorm furnishings and higher-level tech purchases.

While other forecasters are somewhat less pessimistic—Deloitte recently predicted that spending would be flat to down slightly—the research consensus seems to be that parents are cutting costs whenever they can.

“The economic outlook is kind of cloudy,” says Jack Kleinhenz, the NRF’s chief economist, in a webinar detailing shopping trends. “Consumers are on a firm, stable footing – even if they don’t feel that way. And uncertainty is hard.”

That includes an improving – but still concerning – inflation rate and slower wage gains. 

He notes that people feel stable in their employment, and the savings rate is rising. Use of credit is, too, and he calls that “a two-sided coin. It can mean consumers are doing well and using credit because they know they’ll be able to repay it.”

However, using credit can also indicate financial need, and he notes that delinquency rates are rising, especially among lower-earning households.

“But delinquencies are not at an alarming level.”

The NRF says that 55% of back-to-school shoppers have already started by early July. And retailers are already offering consumers plenty of deals. Walmart, for example, just announced thousands of items, including backpacks and lunchboxes, priced at less than $10. Target has been hyping a complete school supply basket for under $20 and a backpack priced at less than $5.