Electronics and Apparel to Fuel Back-to-School Spending

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Electronics and Apparel to Fuel Back-to-School Spending, According to
Latest NRF Survey
-Total spending expected to reach $17.6 billion-

Washington, DC, July 18, 2006 –With record temperatures across the nation making headlines, many parents are already preparing their back-to-school shopping lists and thinking ahead to fall.  According to the National Retail Federation’s (NRF) 2006 Back-to-School Consumer Intentions and Actions Survey, conducted by BIGresearch, families with school-aged children will be spending more on back-to-school shopping this year than last, with the average family spending $527.08, up from $443.77 in 2005.  Total spending is estimated to reach $17.6 billion, up from $13.4 billion last year.

While spending will jump in all categories, electronic and apparel purchases will fuel this year’s back-to-school growth.  Total spending on electronics or computer-related equipment, such as home computers, laptops, PDAs, or calculators, is estimated to increase by more than $1.5 billion this year ($3.82 billion vs. $2.06 billion), rebounding after a sharp decline in 2005. 

“The back-to-school shopping season serves as an important bellwether for the holiday season by helping retailers pinpoint emerging trends and popular products,” said Tracy Mullin, NRF President and CEO.  “Retailers will be tracking the performance of apparel and electronics very closely to ensure that their stores have the right merchandise mix for the fourth quarter.”

Apparel is also expected to be a big performer, with the average consumer expected to spend $228.14 (up from $205.31 in 2005).  Other popular items on consumers’ back-to-school lists include shoes ($98.34) and school supplies, such as notebooks, folders, pencils, backpacks, and lunchboxes ($86.22).

One in five (15.9 %) parents with school-aged children have kids that are required to wear a uniform.  According to the survey, those parents will spend more on apparel and accessories ($233.73 vs. $228.14) and shoes ($119.91 vs. $98.34) than parents who do not have to buy uniforms.  In addition, more consumers with children who are required to wear uniforms will shop at department stores (56.8% vs. 53.3%), specialty shops (36.2% vs. 30.9%), and through catalogs (7.1% vs. 5.0%) than those with children that do not wear uniforms.

Once again this year, the survey found shifts in spending by region.  Consumers in the West are beefing up their back-to-school budgets ($409.19 last year vs. $479.45 this year), while spending in the South is expected to rise as well ($434.09 in 2005 vs. $544.54 this year). While consumers in the Midwest cut back in 2005 ($404.68), they are expected to bump up spending ($521.10) this year.  The only area where consumers are pulling back is in the Northeast, where consumers will be spending an estimated $456.38, down from $513.07 in 2005.

Many parents have already begun checking items off of their shopping lists as they hit the stores early to take advantage of back-to-school promotions.  The survey found that one in six parents (16.5%) will begin shopping for back-to-school merchandise at least two months before school starts.  Close to half (41.9%) will begin three weeks to one month before school starts, and one-in-three (32.5%) will wait until 1-2 weeks before school begins.

“As retailers begin to roll-out special promotions and savings, consumers will begin hitting the stores to scoop up essential back-to-school merchandise,” said Phil Rist, Vice President of Strategy for BIGresearch.  “This year we will see a variety of unique and fun merchandising strategies, encouraging consumers to begin their shopping sooner rather than later.”

According to the survey, discount stores will remain popular back-to-school shopping destinations, with nearly three-quarters (72.2%) of shoppers heading to discounters to purchase items on their lists. Department stores and specialty stores will be seeing increased traffic this year. More than half of consumers will head to major department stores to complete a portion of their back-to-school needs (53.3% this year vs. 39.7% last year) and close to a third will shop at their favorite specialty shop, such as clothing or electronics store (30.9% in 2006 vs. 18.8% in 2005).  Other popular destinations include office supply stores (35.8%), drug stores (16.3%) and online (15.2%).

Children will once again be investing more of their own money in back-to-school items. Parents said that their teenagers will be spending an average of $28.99 of their money, up from $20.47 in 2005, though still down from $38.51 in 2004.   Pre-teens will be spending more as well, with the average pre-teen spending $12.72, up from $8.12 last year.

About the Survey
The NRF 2006 Back-to-School Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the Back to School season. The survey, which polled 9,032 consumers, was conducted for NRF by BIGresearch from July 5-12. The consumer poll has a margin of error of plus or minus 1.0 percent.

BIGresearch is a consumer market intelligence firm that provides unique consumer insights that are gathered online utilizing very large sample sizes. BIGresearch’s syndicated Consumer Intentions and Actions survey monitors the pulse of more than 7,000 consumers each month to empower its clients with unique insights for identifying opportunities in a fragmented and changing marketplace.

The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees – about one in five American workers – and 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

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