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Parents Holding on to Rebate Checks for Back-to-School Purchases

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For Immediate Release
Kathy Grannis or Ellen Davis (202) 783-7971
grannisk@nrf.com or davise@nrf.com

Parents Holding on to Rebate Checks for Back-to-School Purchases
-College Spending Drops as K-12 Spending Rises-

Washington, July 22, 2008 – One-fifth of parents nationwide have set aside a portion of their stimulus check for back-to-school purchases, according to the National Retail Federation’s 2008 Back to School Consumer Intentions and Actions Survey, conducted by BIGresearch on 8,361 respondents. The survey found that the average family with school-aged children will spend $594.24 on back-to-school purchases, compared to $563.49 last year. Total back-to-school spending for Kindergarten through 12th grade this year is estimated to reach $20.1 billion.

While spending in most categories will remain flat over last year, electronics spending will continue to rise as many parents plan to spend some of their tax rebate check on household electronics like computers and cell phones. This year, parents will spend $151.61 on electronics purchases during the back-to-school timeframe, up from $129.24 last year. Spending on clothing ($234.51 vs. $231.80 last year), shoes ($109.75 vs. $108.42) and school supplies ($98.37 vs. $94.02 last year) will see more moderate increases.

“Strong promotions and must-have brands will help retailers stand out in the crowd as shoppers look for the best bang for their buck on back-to-school purchases this year,” said Tracy Mullin, President and CEO of the National Retail Federation. “While cost will be the deciding factor, some families will use rebate checks to soften the blow, taking advantage of promotions and deals when they can.”

With retailers starting back-to-school promotions earlier, parents are taking the opportunity to search longer for good bargains. This year, more parents (46.4% vs. 45.2% in 2007) will begin shopping at least three weeks before school starts.

A large majority of consumers will head to discount stores (73.0%) for back to school purchases this year, trying to stretch their dollar as far as possible. Others will head to department stores (56.6%), clothing stores (47.8%), electronic stores (21.4%), office supply stores (41.8%) and drug stores (18.2%). As comparison shopping becomes more popular among consumers looking for the best deals and gas prices continue to rise, 24.8 percent of back-to-school shoppers will buy online, compared to 21.4 percent last year.

“This year’s back-to-school shopper is a bargain hunter at the core,” said Phil Rist, Vice President of Strategy at BIGresearch. “Though parents want to make sure kids are fully prepared for school, they will be comparing prices online and in stores before making any big purchases.”

When it comes to how much say children have in parents’ buying decisions, more than half of parents (54.5%) say their children influence at least fifty percent of back-to-school purchases. But that isn’t to say that parents are the only ones spending: according to the survey, teenagers will spend an average of $26.29 of their own money for back-to-school this year, while preteens will spend $11.44.

—As Students Adapt to Economy, Back-to-College Spending Drops—

While results from the back-to-school survey were surprisingly strong, spending on college merchandise will wane this year. Back-to-College spending, which has helped buoy retail sales for the past five years, will drop seven percent this year, from an average of $641.56 per person last year to $599.38 this year.* With total back-to-college spending expected to reach $31.26 billion, 2008 back-to-college and back-to-school spending combined will total $51.4 billion.

“College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat,” said NRF President and CEO Tracy Mullin. “While students will still be buying school supplies, they will scale back spending on clothing, electronics and dorm furnishings.”

While students will still allocate the largest portion of their budget to electronics, spending will fall to $211.89 per person from $258.43 last year. Spending on clothing ($134.40 vs. $149.85 last year) and dorm furnishings ($90.90 vs. $109.85 last year) will also drop, while spending on shoes will remain flat ($58.46 vs. $59.90 last year). Only one category—school supplies—will experience a notable increase, from $63.52 last year to $68.47 this year. Spending on collegiate gear, a new category, will average $35.26 per person.

“Though every college student wants the latest-and-greatest gadgets, students are being frugal this year,” said Phil Rist, Vice President of Strategy at BIGresearch. “While some may opt for a cheaper model, many students may take advantage of computer labs at school or a family computer at home instead of investing in one themselves.”

Many students are adapting to the current economic environment by living at home, according to the survey, with 54.1 percent of college students commuting to campus from their parents’ houses this year, up from 49.7 percent last year.

According to the survey, college bookstores are most likely to be affected by a drop in back-to-college spending, with only 41.8 percent of students planning to buy from those stores, a sharp decrease from 57.2 percent last year. Students will also shop less at clothing stores (30.7% vs. 34.3% last year) and electronics stores (19.6% vs. 20.9% last year).

About the Survey
The NRF 2008 Back to School and Back to College Consumer Intentions and Actions Surveys were designed to gauge consumer behavior and shopping trends related to back to school spending and back to college spending. The surveys were conducted for NRF by BIGresearch. The poll of 8,361 consumers was conducted from July 1 -8, 2008. The consumer polls have 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 7,500 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 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com


* Average consumer spending and total back-to-college spending calculations differ from previous years, as they exclude spending on textbooks and include spending on collegiate items. Previous years have been recalculated to account for the changes.