Back to school spending rises despite inflation concerns

CHICAGO, July 21, 2022 – JLL Retail Research conducted an online survey of 1,001 parents of school-age children in mid-June 2022 to learn how they intend to shop for the back-to-school season, how inflation is affecting purchase plans, which retailers they plan to visit and how much they plan to spend.

Inflation has been a rising concern over the last few months. As a result, consumers pulled back on spending in May 2022 when retail sales dipping 0.3 percent from the previous month. Declines were across most categories except for restaurants and drinking places and grocery stores, according to the U.S. Census Bureau Advanced Monthly Retail Trade report. However, in June, retail sales showed a 1.0 percent increase from the previous month and a notable 8.4 percent increase from June 2021. Overall, these numbers show consumer spending remains robust, but, as inflation persists, consumers are paying more for essentials.

“Despite inflation concerns, back-to-school spending might reach a record high this season,” said Naveen Jaggi, President of Retail Advisory, JLL. “Our survey results show parents are resilient and plan to ensure their child has the proper school supplies and clothes they need for this upcoming school year, but retailers should be prepared for consumers to break brand loyalty, depending on better pricing and inventory options.”

According to JLL’s back-to-school survey, roughly 31.5 percent of millennials started shopping before July and more than 7 percent of Gen Zers have already completed shopping. Additionally, 34.2 percent of Gen Xers are more likely than other generations to wait until August to shop. These purchases could be enough to continue to lift retail sales.

Additionall, the survey gathered the average budget this year for back-to-school shopping is $339. Last year, parents spent an average of $322 per child. This difference in how consumers respond to inflation helps explain why planned back-to-school spending, on average, rose 5.4 percent, according to JLL’s survey. While 37.9 percent of parents plan to spend somewhat less than last year, and 27.2 percent plan to spend significantly less, those whose budgets are not affected by inflation plan to spend considerably more than in 2021. Therefore, the net result is moderate growth year-over-year. 

With that said, JLL’s survey results show parents whose budgets will be significantly affected by inflation plan to spend 15.0 percent less than last year, on average. Those whose budgets will be somewhat affected by inflation will spend 5.8 percent less, and parents whose budgets are not affected by inflation will spend on average 31.5 percent more than they did in 2021.

“Predictably, our survey results show most parents plan to use multiple cost-saving methods to allay the effects of inflation,” said James Cook, Director of Retail Research, JLL. “More than half of shoppers will look for sales and coupons, discounters will remain the most popular retail type and free shipping or delivery will be the most important determinant of where to shop online.”

Once again, Walmart, Target and Amazon far outstrip the competition for back-to-school shopping. In the survey, parents were asked to name the top three retailers where they plan to shop, almost two-thirds of parents specified Walmart, 53.3 percent chose Target and half chose Amazon.

JLL’s survey results show parents plan to use the convenience of having at least some of their back-to-school purchases shipped to their homes, but these aren’t consumers who are looking for deals its 71 percent of the higher income parents (earning more than $150,000) who plan to buy online for home delivery. Additionally, higher income consumers are more likely to utilize curbside pickup and buy online pick-up in store (BOPIS). 

“The rise in prices may be an opportunity for retailers to gain consumer trust and loyalty by offering discounts and free shipping options,” said Jaggi. “The consumers are clearly willing to spend this year, but where they choose to spend will be entirely up to the retailer.”