Inflation is having a serious impact on back-to-school spending this fall—with early shoppers already reporting that they plan to spend more this year.
- A new report from the National Retail Federation says consumers will spend record amounts on school and college expenses this year.
- The average family spending on items increased by $25 on average this year from $864.35 to $890.07.
- National back-to-school spending increases yearly: from 2021 ($36.9 billion) to 2022 ($37.1 billion) to an expected total of $41.5 billion this year.
- A Crayola survey found 31% of parents expect inflation will have a “very big” impact on shopping, while 29% expect an “extremely big” impact.
Why It’s Important
With most American schools beginning their fall classes between mid-July and early September, back-to-school shopping has already begun. Unfortunately, the economy continues to struggle under tight conditions that are negatively impacting consumers.
The Bureau of Labor Statistics reported on July 12 that inflation increased prices by 3% between June 2022 and June 2023. While this is down from last June’s rate of 9.1%, it is still a sizable increase that pinches consumer spending.
Much of the expensive average spending comes from the demand for expensive consumer electronics. 69% of shoppers are planning to purchase new laptops, tablets, or calculators going into the fall semester, with a total of $15.2 billion expected in electronics sales in the coming months.
“Back-to-class shopping is one of the most important consumer shopping occasions of the year. Our research for 2023 shows American consumers are eager to jumpstart their back-to-school and college purchases early. Retailers have been preparing for months to ensure they are well stocked with essential items that families and students need for the school year,” says NRF President Matthew Shay.
As Axios notes, the first weekend in August is notable for being a tax-free shopping weekend for at least nine states. Arkansas, Florida, Iowa, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, and West Virginia can enjoy a tax holiday this weekend. Five other states—including Connecticut, Maryland, Massachusetts, New Jersey, and Texas—have upcoming tax holidays as well.
While tax holidays are not a viable solution or option for every state and county, consumers in these states do have the opportunity to reduce the burden of fall back-to-school spending by taking advantage of reducing prices at major retailers.
“Even though consumers plan to spend more on school and college-related items this year, they are still looking to find the best value and deals. Consumers are stretching their dollars by comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than last year,” says Prosper EVP Phil Rist.