This back-to-school season, parents are gearing up to spend more than usual in a highly inflationary environment.
U.S. consumers have said they plan to spend on average $380 per student this year for back-to-school shopping, up 20% compared with 2021. That’s according to KPMG’s 2022 Back to School Consumer Pulse Survey, which surveyed more than 1,300 consumers across 800 households in the United States about their shopping plans for the back-to-school season this year.
The sharp increase in predicted spending comes as prices continue to rise. Consumer prices spiked 9.1% in June compared to a year ago, according to the Bureau of Labor Statistics’ monthly report — the highest rate in more than 40 years. Footwear prices, specifically, grew 5.8%.
Given the current environment, 56% of consumers plan to spend more on back-to-school in 2022 compared to 2021, KPMG found. And 82% said this is because of rising product costs. Most consumers expect to spend the most on core school supplies, followed by apparel and footwear.
About 74% of respondents reported being moderately or extremely concerned with inflation, and more than half (52%) reported being extremely concerned. Among Gen X respondents, 57% said they are extremely concerned with inflation.
“Back-to-school shopping is showing a resilient consumer ready to spend, even with the full expectation of paying higher prices,” Matt Kramer, KPMG consumer and retail national sector leader, said in a statement. “Consumers want to get out and physically shop in stores while searching for deals to stretch their budgets.”
When it comes to footwear and apparel, which technically live in the discretionary category, consumers are indicating a heightened sense of consciousness around what to wear as offices and schools reopen and live events resume. As such, apparel and footwear will likely rank lower on the list of categories seeing spending cuts from consumers during the back-to-school season, said experts.
“I think consumers would rather go out to eat a little bit less than not get the latest pair of the footwear they’re looking for,” Scott Rankin, advisory leader for KPMG’s consumer and retail sector practice, told FN in a recent interview. This phenomenon explains, in part, why the footwear industry is in a relatively stable position amid inflation compared with other industries.
As such, almost 80% of survey respondents in the recent KPMG report said they consider apparel and footwear to be an essential part of their back-to-school spend.
However, given high prices, some consumers might be more inclined to shift their shopping to lower-priced channels. From June 1-14, searches for backpacks on ThredUp, a resale platform, increased 48%, and searches for kids’ items increased 50%, compared to the period between May 18-31.
The off-price and low-cost sectors are bracing for a similar surge in momentum. While most consumers reported in the survey that mass merchants and online were their top channels for shopping, dollar stores ranked third.
Brett Rose, CEO of United National Consumer Suppliers — which sources products to several off-price retailers, including Ross Stores and some TJX-owned locations — said many consumers will turn to off-price stores as their first choice to find certain “brand agnostic” items like notebooks and pens. “Maybe they’re going to look at Walmart, but they’re also going to look at Dollar Tree and Dollar General because they realize they can get the same thing,” he said.