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NPD on Back-to-School: Consumers Expected to Slow Spending Again This Year
All signs point to another year of slowed consumer spending for back-to-school – but NPD's latest data shows the decrease won't be as big as the one seen in 2008.
Overall, consumers tell NPD that they aren't in a hurry to shop. This year there was a five percent increase in the number of consumers saying they either haven't started or don't plan to shop for back-to-school as of July 2009.
"While this five percent increase is not a huge increase, it's enough of a shift to show us that there is no real rush by consumers to shop, even with the deep discounts being offered early in the season," said Marshal Cohen, chief industry analyst, The NPD Group, Inc.
| Have you purchased for back-to-school yet? | 2009 |
| Yes | 6% |
| Not yet begun | 17% |
| No, won't shop for back-to-school | 77% |
In addition to starting their shopping later, consumers say they plan to spend less for back-to-school this year. The number of consumers who said they plan to spend less for back-to-school rose by nine points.
"Last year we had an even bigger drop-off in spending intentions," said Cohen. "So the good news is that the bigger drop-off is behind us. And the not-so-bad news is that back-to-school is in line with the current trend of consumers cutting back but not out."
| Back To School Spending Intentions | 2009 | 2008 |
| Plan to Spend Less? | 44% | 35% |
| Plan to Spend the Same? | 32% | 34% |
| Plan to Spend More? | 23% | 31% |
Additionally, this year consumers say they are making a dramatic shift in their spending priorities. Most noticeable is a shift away from footwear and apparel purchases (down nine and eight points, respectively).
| Category Spending In Dollar Order | 2009 | 2008 |
| School Supplies | 77% | 78% |
| Apparel | 52% | 60% |
| Footwear | 39% | 48% |
| Electronics* | 30% | 34% |
| School Bags | 29% | 33% |
| Apparel Accessories | 16% | 20% |
| Beauty Products | 13% | 17% |
| Bedding | 12% | 13% |
| Calculators | 8% | 4% |
| Small Appliances | 6% | 7% |
Source: The NPD Group/Back-to-School Study 2009
Seventy-nine percent of consumers tell NPD "value" is the reason they buy something for back-to-school. Running a distant second is "required by school," at 45 percent.
| Why will you purchase? | 2009 | 2008 |
| Value | 79% | 80% |
| Required | 45% | 51% |
| Replacement | 28% | 30% |
| Child Wanted It | 18% | 21% |
| Trendy/Fashionable | 13% | 18% |
| Influenced By Friends | 2% | 4% |
As consumers shift their purchasing behavior, they also will shift where they will shop. Indications are that department stores will take the hardest hit with 20 percent of consumers saying they will shop there, a four percent decline from last year. Office supply stores are consumers' top shopping destination, with 42 percent of consumers saying they will shop there, followed by mass merchants/discounters at 82 percent. Chain stores come in third, at 29 percent.
"Back-to-school will be a big indicator of consumers' psyche with regard to overall spending this year compared to last year. So far, we are seeing continued caution when it comes to spending. Consumers are clearly putting need over desire. They will be more highly influenced by value than by fashionable or trendy products," Cohen said.
To learn more about how NPD can help your company understand back-to-school and other key selling seasons, contact Charles Camaroto at 866-444-1411 (+1-516-625-2311 outside the U.S.), or email contactnpd@npd.com.