Back-to-school spending forecast flat at $31 billion

Parents will be looking for bargains and pinching pennies when shopping for back-to-school clothing and supplies, according to a report released today by accounting and consulting firm Deloitte.

Back-to-school spending for K-12 students is expected to be $31.3 billion, essentially unchanged from $31.9 billion in 2023.

Parents surveyed in late May said they would shop early in hopes of taking advantage of sales and would limit back-to-school spending due to rising prices for other household essentials.

Parents want to save time and money

“The overall theme is that this is the year that parents are looking for value and convenience,” Stephen Rogers, managing director of the Deloitte Insights Center for Consumer Industries at Deloitte Services, said in an interview.

“With the focus on value, retailers and consumer goods companies face some brand loyalty and sales challenges,” Rogers said.

“Most parents are dealing with tight cost of living issues,” he said. “Seven out of 10 Americans are worried about rising prices for everyday purchases,” despite recent good news about inflation, he said.

Surveys show that a key way parents plan to save on back-to-school expenses is to shop early. Two-thirds of back-to-school spending (66%) is expected to occur by the end of July, up from 59% last year.

“School shoppers have been trained to look for these early summer sales, primarily starting with Prime Day,” Rogers said. He said other retailers have scheduled their sales for Prime Day, with the result that the back-to-school shopping season is brought forward, Holiday promotions are also ahead of schedule.

Parents also said they plan to shop in more retail formats this year when looking for deals – 4.7 compared to 3.9 in 2023. Save money, not brand loyalty, survey finds.

Parents, he said, “are considering buying private label products, hoping to reduce costs without compromising on quality.”

However, even cost-conscious parents stretch their budget on must-have products or brands that their children want most.

“Parents are willing to splurge once in a while. Not everything is cost-focused,” Rogers said.

According to a Deloitte survey, 85% of parents said they may be influenced by their children to spend more on highly desired items or brands.

Clothing, school supplies are the biggest parts of the budget

In addition to the $31.3 billion spent on clothing and other school-related items, parents include extracurricular activities in their budgets, with 86% planning to spend an additional $582 on these activities, according to Deloitte.

Clothing and accessories are expected to account for the largest share of back-to-school spending, at $12.6 billion. Parents plan to spend $7.4 billion on school supplies and $8.6 billion on technology products.

According to Deloitte, technology spending is expected to drop 11% compared to 2023.

77% of parents surveyed said that mass merchants are the most popular retail format for back-to-school shopping, followed by online retailers, accounting for 65%. Discount retailers and department stores were tied at 39%.

Seven in 10 parents say convenience also affects their shopping choices, with location, delivery options and ease of returns being important factors.

Shoppers look forward to early sales

One of the key takeaways from the survey results for retailers, Rogers said, is the importance of having back-to-school sales and promotions early.

“Given that summer sales events have become the unofficial kickoff to the back-to-school season, they need to have promotional offers ready and content lined up,” he said.

Retailers should also be aware that as parents look to save time and money, they will look to consolidate their shopping trips and if they find other products they need in the store, they will buy them.

“In-store product discovery may lead to more direct conversions,” Rogers said. “It's a bird in the hand because parents want to be more efficient.”

However, Rogers said, “those retailers that have really strong omnichannel capabilities that can offer shoppers a more hybrid path to purchase and maybe give you some loyalty incentives so you can easily buy online or in-store, I think these guys are going to be in a good position this season.