What: Inflation and a return to classrooms are causing an increase in back-to-school shopping that’s coming earlier than expected.

Why it is important: U.S. consumers are likely to spend more on back-to-school shopping this year due to fears that prices will continue to rise.

The National Retail Federation and Prosper Insights & Analytics as well as KPMG conducted surveys of U.S. consumers regarding their back-to-school shopping plans. NRF and Prosper reported that back-to-school spending is expected to match 2021’s record high of 37 billion USD with families planning to spend an average of 864 USD on school items.

The pandemic plays a significant role in the increased spending on school-related purchases. Adapting to virtual and hybrid classes had normalized families spending more on computer equipment, home furnishings, chairs, desks, and lighting, so their kids could attend classes online.

Back-to-college spending is also expected to reach the highest in NRF and Prosper’s survey history, projected at nearly 74 billion USD. Prosper and NRF indicate that the top five shopping destinations are: online (50%), department stores (45%), discount stores (29%), office supply stores (27%), and college bookstores (26%).

According to KPMG, U.S. consumers spending on back-to-school shopping will go up 20% compared with 2021. 56% of consumers that were surveyed plan to spend more on back-to-school in 2022 compared to 2021. And 82% said this is because of rising product costs.

Consumer fear of inflation has contributed to the increased spending as well.  As of early July, 56% of shoppers had already started shopping for school and college supplies, with consumers figuring the longer they wait, the higher the prices could get. KPMG emphasized consumers getting out and physically shopping to search for the best deals and stretch their budget.

Consumers are indicating a heightened sense of consciousness around what to wear as offices and schools reopen and live events resume. As such, apparel and footwear will likely rank lower on the list of categories seeing spending cuts from consumers during the back-to-school season.

Some consumers did indicate shifting their shopping to lower-priced channels. Many turning to off-price stores as their first choice for ‘brand agnostic’ items like notebooks and pens.

Increased spending for back-to-school shopping season - source 1

Increased spending for back-to-school shopping season - source 2