Is inflation the biggest back-to-school story?

Deloitte, KPMG and Mastercard all issued “Gold Star” back-to-school spending forecasts in the range of 7.5 percent to 20 percent, attributing spending increases in part to inflation. KPMG’s survey found 75 percent of consumers express concerns over inflation, especially Gen X (77 percent) shoppers and those from lower-income households (78 percent). The widespread return to classrooms in 2022 is expected to revive categories related to social interaction, such as footwear and apparel, along with traditional supplies. The National Retail Federation’s (NRF) back-to-school survey was an outlier, predicting flat back-to-school spending against record year-ago spending. NRF found that, compared to 2019, back-to-school spending has increased “dramatically” as families adjusted to changes from virtual and hybrid learning. Whether hybrid learning will alter back-to-school spending going forward will be closely watched as many schools still deploy some digital content. Supply chain disruption could return as a factor frustrating back-to-school shoppers. In Deloitte's survey, 63 percent of respondents said they expect stock-outs during the back-to-school season. Inflation, however, was the big topic explored in surveys taken over June and July. NRF’s analysis found that among back-to-school items, the biggest price increase from 2019 to 2022 was seen in stationary (up 21.8 percent), followed by furniture & bedding (up 21.1 percent) and footwear (up 9.9 percent). NRF found that back-to-school remains an “essential category” with 38 percent of parents cutting back in other areas to cover the cost of items for the upcoming school year. A Bankrate survey concluded that the primary way back-to-school shoppers plan to offset higher costs was by seeking more coupons, discounts and sales (54 percent), buying fewer school items  such as supplies, clothes, etc. (43 percent), shopping for cheaper brands (43 percent) and stretching the items they currently have for another year (39 percent). Surveys showed some parents expect more deals this year due to the elevated inventories at many stores. Matt Kramer, KPMG National Sector Leader, Consumer & Retail, KPMG LLP said, “Despite concerns about inflation, resilient consumers plan to spend more on back-to-school items this year. While shoppers expect to pay higher prices, many will return to the store in search of the best deals.”

• 2022 Deloitte back-to-school survey – Deloitte
• Mastercard SpendingPulse forecasts 7.5%* growth for U.S. back-to-school retail sales – Mastercard
• Reading, writing, and resilience – KPMG
• 2022 Back-to-School Preview – Numerator
• 41% of back-to-school shoppers will change how they shop due to inflation – Bankrate
• Families Prioritize Back-to-School and College Spending Amidst Rising Inflation – National Retail Federation
• Back-to-School Survey: One-Third of Teens Say Rising Cost of School Supplies a Concern – Junior Achievement USA/PRNewswire