- The overall back-to-school market is expected to decrease to $31.2 billion with spending on clothing and technology down in favor of school supplies, according to Deloitte.
- Families with children in elementary through high school plan to spend an average of $890.07 on back-to-school items this year, approximately $25 more than last year’s record of $864.35 and a new high, according to National Retail Federation and Prosper Insights and Analytics.
- According to Deloitte, the majority of parents plan to get an early jump on back-to-school shopping, with 59% of spending expected to occur by the end of July, up from 53% in 2022.
Back-to-school spending for K-12 students is expected to decrease by 10% to $597 per student, according to a recent survey from Deloitte. The overall back-to-school market is expected to decrease to $31.2 billion with spending on clothing and technology down in favor of school supplies. Despite this shift, the overall market is still above pre-pandemic levels, increasing 12.2% since 2019, Deloitte reported.
On the other hand, a survey from the National Retail Federation (NRF) and Prosper Insights and Analytics found consumers are expected to spend record amounts for both back-to-school and back-to-college shopping this year. Back-to-school spending is expected to reach $41.5 billion, up from $36.9 billion last year and the previous high of $37.1 billion in 2021. Back-to-college spending is expected to hit $94 billion, about $20 billion more than last year’s record.
“Back-to-class shopping is one of the most important consumer shopping occasions of the year,” NRF President and CEO Matthew Shay said in a press release. “Our research for 2023 shows American consumers are eager to jumpstart their back-to-school and college purchases early.”
Spending more on school supplies
Higher prices weigh on many families as they prepare for the upcoming school year, Deloitte reported. In addition to a 23.7% increase in the cost of school supplies in the past two years (per the Bureau of Labor Statistics' Consumer Price Index), 31% said their households are in a worse financial situation than last year, and nearly half (51%) expect the economy to weaken in the next six months.
The effects of inflation
Consumers across income groups are expected to find ways to economize throughout the season. For example, shoppers generally prioritize retailers with competitive pricing, Deloitte reported. Those surveyed favored:
- mass merchants — 80%.
- online retailers — 60%.
- off-price retailers and dollar stores — both at 33%.
For all back-to-class shoppers, the top destinations NRF and Prosper reported are online, department stores and discount stores.
“Even though consumers plan to spend more on school and college-related items this year, they are still looking to find the best value and deals,” Prosper Executive Vice President of Strategy Phil Rist said. “Consumers are stretching their dollars by comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than last year.”
Deloitte’s survey also found these inflationary consumer behaviors:
- Among K-12 parents, 34% are postponing nonessential back-to-school purchases, up from 31% in 2022.
- Over two-thirds of parents (68%) expect to spend the same or less on back-to-school year-over-year.
- Inflation is why some parents plan to spend less on back-to-school and why others plan to spend more. Among parents spending less, 51% attribute it to reduced disposable income (up from 45% in 2022), while 75% of those spending more point to increased prices (up from 60% in 2022).
- More families plan to use cash (77%, up from 72% in 2022) than credit cards (52%) for back-to-school purchases.
- The percentage of parents planning to buy sustainable back-to-school products is down from 50% in 2022 to 35% this year (although slightly higher among millennials at 38%). Nearly half (47%) of those who won't purchase sustainable products say they are not affordable. However, sustainable back-to-school shoppers spend 36% more than others.
However, despite financial concerns, nearly 60% of parents shopping for clothing/accessories and technology items are willing to splurge on better quality products or to treat their child. Many parents also said their child can convince them to splurge on clothing (57%) and tech products (56%), according to Deloitte.
"With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families,” Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader, said. “Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods. Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed. It's not all bad news for retailers with many parents willing to splurge on certain items to treat their children, which may provide an opportunity for retailers."
Shopping earlier and in-store
As of early July, more than half (55%) of consumers who are buying for back-to-class said they have already started shopping, NRF and Prosper reported. This is on par with last year, but is up from 44% in 2019, and is in line with the trend of consumers shopping earlier for major spending events. While consumers have started shopping early, as of early July, 85% said they still have at least half of their shopping left to do.
According to Deloitte, the majority of parents plan to get an early jump on back-to-school shopping, with 59% of spending expected to occur by the end of July, up from 53% in 2022. Furthermore, 35% believe better deals occur earlier in the season versus 26% who believe they occur later.
Only 34% of respondents say they often find lower prices online. As a result, 74% plan to shop in-store versus 56% plan to shop online for most back-to-school shopping.
Deloitte also found that:
- In-store shopping is preferred for traditional categories, while those shopping for technology largely shop online.
- Two in 10 shoppers are undecided about whether to purchase back-to-school items in-store or online, representing a $6.3 billion opportunity for retailers.
- Among online shoppers, 88% are willing to meet a minimum order value to receive free shipping. On average, consumers are willing to spend $32 on a minimum order value for free shipping. Six in 10 (59%) restrict their shopping to retailers with free returns, and 68% prefer returning in-store to avoid paying return fees.
- Nearly half (49%) will research online before purchasing back-to-school products in the physical store, and 55% will research retailers' return policies before buying.
"During the pandemic, the pull forward in back-to-school spending was to overcome concerns around stock-outs, but this year, we see consumers planning to economize throughout the back-to-school shopping journey,” said Brian McCarthy, Deloitte Consulting’s principal. “This cost consciousness is causing them to shop earlier, shop in-store to find the best price and prioritize what they'll purchase to start school. We expect a potentially strong season for brick-and-mortar, particularly among mass merchants who deliver a one-stop shopping experience."