Back to College Spending Hits $24.9 Billion Due to Double-Digit Surge in Electronics Purchases

Back to College Spending Hits $24.9 Billion Due to
Double-Digit Surge in Electronics Purchases
--Department Stores, Specialty Stores Will See More Shoppers --

Washington, DC, August 15, 2006—While most back-to-college categories like clothing and dorm furnishings will see modest gains this year, the season will continue to grow due to an incredible increase in electronics spending. The fourth annual NRF 2006 Back-to-College Consumer Intentions and Actions Survey, conducted by BIGresearch, found that college students and their parents will spend $24.9 billion returning to campus this year, up 6.3 percent and more than double what parents of K-12 students will spend on back-to-school.

The biggest driver in college spending this year will be in electronics. College students are expected to spend 27.5 percent more on electronics purchases ($10.46 billion) as the category expands to include flat screen TVs, XBoxes, iPods, and notebook computers. Spending on dorm furnishings, which has been a large driver of college spending, is expected to be moderate this year with the category growing 5.4 percent to $3.82 billion. Clothing and accessories sales, at $5.78 billion, are expected to be flat, though shoe sales will see an impressive 13.0 percent increase to $2.26 billion. School supplies (down 14% to $2.55 billion) will see a decrease in spending.

“Today’s college students were using computers before they could write, which explains their gravitation toward electronics,” said NRF President and CEO Tracy Mullin. “By merchandising and marketing to the college crowd, retailers are hoping to not only boost this year’s sales but also to gain customers for life.”

Though spending on college items will rise this year, students and their parents will be scaling back on the number of stores where they will purchase merchandise. This year, fewer students plan to shop at discount stores (55.8% last year vs. 51.8% this year), drug stores (12.8% vs. 10.9%), office supply stores (41.0% vs. 38.8%), and college bookstores (59.8% vs. 56.8%). In fact, the only two sectors that will see an increase in traffic this year include department stores (36.1% last year vs. 39.3% this year) and specialty stores (20.8% vs. 23.5%).

“As consumers remain concerned about gas prices, they are more inclined to scale back on the number of stores they visit,” said Phil Rist, Vice President of Strategy for BIGresearch. “College students, who are some of the most technologically-savvy shoppers, will likely use the Internet to look for prices and research merchandise before setting foot in a store. Retailers realize that their websites are the first contact that they have with many customers and have been investing heavily in that channel to attract the college crowd.”

As in previous years, freshmen will spend the most this year with the average first-year college student spending $813.76, largely on electronics and dorm furnishings. Seniors, at $287.11 on average, will spend the least.

The combined $42.5 billion spent this year for back-to-school and back-to-college will rank second only to holiday spending. NRF’s Back-to-School survey, which monitored spending for K-12 students, found that back-to-school spending would see sales of $17.6 billion.

About the Survey
The NRF 2006 Back-to-College 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 8,529 consumers, was conducted for NRF by BIGresearch from August 2-9. 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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