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

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

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

Washington, July 22, 2008 – While results from this year's back-to-school survey were surprisingly strong, spending on college merchandise will wane this year, according to NRF's Back-to-College Consumer Intentions and Actions Survey, conducted by BIGresearch. 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 in 2008.* 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 College Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to back-to-college spending. The survey was conducted for NRF by BIGresearch on 8,361 consumers 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

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* 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.