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Strong B-T-S spending seen, despite inflation concerns

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CHICAGO – Back-to-school spending this season will reach an all-time high, according to an online consumer survey from JLL Retail Research.

JLL conducted the survey of 1,001 parents of school-age children in mid-June to learn how they intend to shop for the back-to-school season, how inflation is affecting purchase plans, which retailers they plan to visit and how much they plan to spend.

“Our survey results show parents are resilient and plan to ensure their child has the proper school supplies and clothes they need for this upcoming school year, but retailers should be prepared for consumers to break brand loyalty, depending on better pricing and inventory options,” said Naveen Jaggi, president of retail advisory, JLL.

B-T-S

Rising prices pushed May retail sales down 0.3% from the previous month, with declines in most categories, with exceptions including grocery retailers and restaurants, according to U.S. Census Bureau data. But retail sales increased 1% in June and were up 8.4% compared with the year earlier. Overall, these numbers show consumer spending remains robust, but, as inflation persists, consumers are paying more for essentials, JLL said.

According to JLL’s back-to-school survey, 31% of millennials started shopping before July and more than 7% of Gen Z’ers have completed shopping. More than a third of Gen X’ers are more likely than other generations to wait until August to shop.

The average budget this year for back-to-school shopping is $339, according to JLL. Last year, parents spent an average of $322 per child. This difference in how consumers respond to inflation helps explain why planned back-to-school spending, on average, rose 5.4% in the survey. While 38% of parents plan to spend somewhat less than last year, and 27% plan to spend significantly less, those whose budgets are not affected by inflation plan to spend considerably more than they did a year ago.

“Predictably, our survey results show most parents plan to use multiple cost-saving methods to allay the effects of inflation,” said James Cook, director of retail research, JLL. “More than half of shoppers will look for sales and coupons, discounters will remain the most popular retail type and free shipping or delivery will be the most important determinant of where to shop online.”

Walmart top destination for two-thirds of respondents

Once again, Walmart, Target and Amazon far outstrip the competition for back-to-school shopping. In the survey, parents were asked to name the top three retailers where they plan to shop, almost two-thirds of parents specified Walmart, 53% chose Target and half chose Amazon.

JLL’s survey results show parents plan to use the convenience of having at least some of their back-to-school purchases shipped toir homes, but these aren’t consumers who are looking for deals its 71% of the higher income parents (earning more than $150,000) who plan to buy online for home delivery.

Additionally, higher income consumers are more likely to utilize curbside pickup and buy online pick-up in store (BOPIS).

“The rise in prices may be an opportunity for retailers to gain consumer trust and loyalty by offering discounts and free shipping options,” said Jaggi. “The consumers are clearly willing to spend this year, but where they choose to spend will be entirely up to the retailer.”

 


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