Matthew Shay, president and CEO of the National Retail Federation (NRF), told Yahoo Finance Live (video above). “So we see families prioritizing things like – in this case, back to school [shopping] And treat that as a base category—and thus shift some of their spending from other discretionary categories to make sure they can take care of the things that are most in demand.”
According to the latest data, US consumer prices – reflected in the Consumer Price Index (CPI) – rose 9.1% year-on-year, the fastest annual pace since November 1981. This has forced many US households to withdraw discretionary spending to focus on what they are On it we consider the most important areas.
“We see in our research, our conversations with consumers, our surveys, that American consumers and families are really doing what they’ve been doing since we got into COVID more than two years ago, which is they prioritize essential spending, and they are changing their spending patterns and developing their behavior to keep pace with the environment.”
In this case, he added, it means consumers “care about their children, primary, secondary and college students who go back to school.”
According to the 2022 NRF annual survey, the average family is expected to spend $864 on back-to-school spending this year, up to $36.9 billion overall — more than $2 billion higher than the 2021-22 school year. Top spending categories include electronics, apparel, accessories, and shoes.
A separate survey from Morning Consult found that 26% of shoppers plan to spend more than $500 on back-to-school shopping this year versus just 7% of shoppers in 2021.
“It’s clear that different families are making different choices and prioritizing different kinds of things,” Shay said. “But classroom spending as a category, overall, is well over $100 billion between back to school — which we define as primary and secondary school — and back to college, which is about two-thirds of that spent.”
The NRF survey also found that in order to cover the cost of back-to-school spending, 38% of families drop out in other areas, 18% of people work overtime or pick up extra hours, 14% take out extra credit cards, and 12% borrow money or condemn.
“I think we’re going to see people trade high-priced goods into goods that are priced to fit their budgets,” Shay said. “And we’ll see families trade in other discretionary items to access the things they decide are essential for this back-to-school season, whatever that may be. I think that includes everything from clothes and shoes, to electronics accessories. [and] Furniture really runs the whole gamut.”
Ethan is a staff writer at Yahoo Finance.
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