Caveat Retailer: Let the Retailer Beware
Back-to-School Shopping Later This Year

Retailers will have to be a little patient this year to see back-to-school sales peak – according to NPD’s new report on back-to-school spending. The report highlights – among other things – positive news for department stores and shoe stores, and planned spending on electronics equipment is up 11 percent.

While students everywhere enjoyed the last vestiges of the summer, retailers geared up for the onslaught of students and parents expected in the aisles during the back-to-school shopping season – but not without some bumps in the road: consumers said they planned to start shopping later than they did last year, and they expected to spend about the same amount of money they did last year, according to our recent survey of over 34,000 shoppers.

Where they’re going shopping
Mass merchants should take the lion’s share of back-to-school purchases this year: 81 percent of consumers planned to shop the mass channel, while 45 percent planned to shop office-supply stores, and 38 percent said they would head to chain stores. There’s also good news for department stores, since 27 percent of consumers said they expect to shop these stores – a three percent increase over consumers’ planned department store visits in 2005. Footwear retailers are also poised to capture more back-to-school sales this year than last: while 27 percent of consumers planned to shop for shoes at footwear retailers in 2005, 29 percent plan to do so this year.

“Department stores and shoe stores have been taking hits from mass merchants for years, when it comes to back-to-school shopping,” said Marshal Cohen, chief industry analyst for The NPD Group.  “So it’s got to be encouraging for them to see an increase in the number of consumers planning to go back-to-school shopping at their stores this fall.”

The shopping list
Other than the obvious plans to purchase school supplies, apparel tops the back-to-school shopping list. More consumers plan to purchase clothing this year, compared to last year (71 percent for 2006 and 66 percent for 2005). Planned purchases of footwear are also up this year (60 percent this year versus 53 percent last year). Other popular planned purchases this year are more in line with plans last year, including cosmetics and other beauty supplies, (flat versus last year, at 13 percent), notebooks and other school supplies, (79 percent versus 81 percent in 2005) and school bags and knapsacks (45 percent versus 41 percent last year). Combined electronics (computers, printers, cell phones, MP3 players, and DVD players/recorders) shows the greatest signs of increased spending: 36 percent planned to purchase in this category, compared to 25 percent last year.

“Value was the primary decision criterion for what to buy and where to shop this year, and school requirements were also top-of-mind for many consumers,” Cohen said, “but kids themselves still have a lot of power in the matter. Nearly a third of consumers said they would buy what their kids asked for.”

Shoppers: Start your engines!
In 2005, 43 percent of back-to-school shoppers had already begun shopping by August 1, and 51 percent shopped between August 1 and September 1. By comparison, just 40 percent of consumers planned to shop that early in 2006, while 56% anticipated shopping after August 1.

And while they’ll be shopping later this year, consumers generally plan to spend on the same levels they did in previous years. In this year’s survey, 21 percent of consumers said they would spend less on back-to-school items than they did in 2005, compared to 26 percent who responded similarly last year. Thirty-four percent said they would spend more this year (versus 33 percent in 2005), and 43 percent said they’ll spend about the same amount (versus 41 percent in last year’s survey). Overall, almost half (47 percent) of consumers expected to spend under $250 per child this year; 28 percent planned to spend between $251 and $500. Seven percent anticipated spending more than $1,000.

Information for NPD’s back-to-school spending poll was collected between June 8 and July 5, 2006 from members of our online consumer panel. Approximately 36,365 females and 4,806 males participated.