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NRF Study Forecasts Big Uptick for B-t-s

The back-to-school season might provide exactly the opportunity retailers have been looking for to get their customers back into stores.

The back-to-school season might provide exactly the opportunity retailers have been looking for to get their customers back into stores.

This story first appeared in the July 19, 2012 issue of WWD.  Subscribe Today.

In a b-t-s forecast being released today, the National Retail Federation projected that consumers with children in kindergarten to the 12th grade will spend an average of $688.62 during the season, 14.1 percent above the $603.63 spent in the corresponding 2011 period. Overall sales for both b-t-s and back-to-college are expected to soar 21.8 percent to $83.8 billion from $68.8 billion last year.

The greatest portion of these expenditures will be for clothing and accessories. Expected purchases for pre-college kids rose 11.6 percent to $246.10 among adult purchasers, from $220.60 last year. The 2012 number represents a moral victory of sorts — for the first time, it’s higher than the $234.51 projected for b-t-s purchases in 2008, a season that ended just weeks before the onset of the financial crisis and restrained buying in the three seasons that followed.

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Other outlets, however, were not quite as sanguine. While NRF’s survey was based on the buying intentions of purchasers, two much less rosy predictions came from organizations that track b-t-s and later holiday results.

Craig Johnson, president of Customer Growth Partners, the New Canaan, Conn.-based consulting and research firm, said he expects sales to rise a “flaccid” 3.9 percent over the 2011 b-t-s season, when sales jumped 6.7 percent. That would make the 2012 b-t-s season “the worst since the unprecedented decline of 3.9 percent in 2009,” the only “down” season he’s aware of since World War II. In addition to automotive, gasoline and restaurant sales, his figures exclude the home improvement and food and beverage categories.

He does expect e-commerce to continue its double-digit growth pace, rising 11 percent for the season.

ShopperTrak, based in Chicago, is calling for a 4 percent increase in retail sales in August, with retail foot traffic up 1.5 percent.

Noting difficult b-t-s seasons in recent years, Bill Martin, ShopperTrak founder, commented, “August will present retailers with a tremendous opportunity to take all steps possible to maximize their shopper opportunity and increase conversion rates.”

As for the NRF findings, spending on footwear is expected to rise 23.6 percent to $129.20 from $104.53 last year, also a postrecession high. Electronics and computer-related purchases are expected to hit $217.88, up 15 percent, and school supplies are seen rising 7.3 percent to $95.44.

Matthew Shay, president and chief executive officer of NRF, noted that, even in light of difficult conditions at retail in the past quarter, a number of factors weighed in favor of higher purchases for the season, including a large class of children entering kindergarten, as well as the annual recognition that clothing bought for 2011 may no longer fit their dependents.

“You can’t put off buying a new pair of pants for a 12-year-old who shot up two or three inches during the year,” said Shay. “Still, in light of recent results, it would be a real stretch and a dramatic kind of supposition, this year in particular, to extrapolate into holiday what we’re seeing here. Just under a third of U.S. households — 30.9 percent — have school-age children, and they’ve indicated that they’re going to be back in the market to play in this space with a narrow time window and a relatively small selection of goods.”

Concern about the economy remains high and will affect the way in which parents browse and buy. Although there was a decline in the number who said they’d spend less overall — 37.8 percent, down from 43.7 percent — the share of those who said they’d do more online shopping rose to 17.9 percent from 15.3 percent in 2011, while those doing more comparative shopping online rose to 32.1 percent from 29.8 percent.

When asked to indicate all the channels of distribution they’d explore on their b-t-s journeys, 39.6 percent of those surveyed designated online, up from 31.7 percent last year and nearly twice the 21.4 percent responding that way in 2007.

“That’s got implications for just about every segment of retailing,” Shay noted.

Discount stores remained the most popular destination for b-t-s shopping, checked off by 67.1 percent of respondents, but that share was down from 68.4 percent last year and its peak of 74.5 percent in 2009. Behind online shopping, the biggest increases in intended destinations for buying came from electronics stores (26.3 percent versus 21.7 percent) and office supply stores (42 percent versus 38 percent). Department stores (59.9 percent versus 57 percent) and clothing stores (52 percent versus 48.7 percent) were the second and third most popular channels for b-t-s shopping.

Shay said that, while discount stores have inherent advantages because of convenience, pricing and the breadth of their assortments, department stores have benefited in recent years from expanded private label offerings.

The NRF b-t-s survey was conducted by BIGinsight and involved interviews with 8,500 consumers between July 2 and 9. The Washington-based association pointed out that its findings relate specifically to purchases made for school-related use and that sales projections were elevated by an increase in the percentage of adults with school-aged children in their households, which rose to 30.9 this year from 26.8 percent last year. Among the NRF study’s more surprising findings was a sharp increase in the prevalence of school uniforms — 22.5 percent of the adults surveyed said their children wear school uniforms, up from 18.4 percent last year and just 15.8 percent back in 2007.