Retail survey: Back-to-school spending up 14 percent

All those calculators and pencils for school add up, but to what?

Back-to-school sales of clothes, shoes, school supplies and electronics make August and September the second-largest period for retailers after the November/December holiday season.

Sales so far look encouraging, say retailers and retail groups, but like so much of the last three years, it’s hard to get a good feel for the future.

A national survey released by the National Retail Federation suggests that people will spend 14 percent more this back-to-school sales season, for a total of $688 per family. The NRF was surprised by the result and cautions that it doesn’t signal a freer-spending consumer over the long-run.

At least one other national retail analyst is less optimistic, calling for 2012 back-to-school sales to be flat or up only slightly.

Some local merchants say they are seeing slightly better back-to-school sales than last year.

Merchants, like their customers, have been whipsawed by a constant barrage of encouraging and discouraging signals. Even though the economy has been slowly improving for three or so years, shoppers are still buffeted by rising and falling levels of anxiety, which affects how much they are willing to spend.

“The business environment has changed so much,” said Andy Warren, general manager of Heads Shoes, which has several locations in the area, “It used to be you could rely on projecting increases and getting fairly close. Now it’s just a lot more vague on what you can expect. You hope for an increase, try to get there and be pleasantly surprised when you get one.”

Shoppers watching what they spend

Back-to-school shoppers at Walmart this week had their mandatory lists to fill, but said they were pinching pennies and hoped to spend less than last year.

Andrea Pauly, 21 and a student at Newman University, was shopping with sister, Katlyn Pauly, 16 and a junior at Garden Plain High School. They were loading up on pens and other school supplies.

Asked if they liked shopping?

“Yeah,” they said in unison.

“But back-to-school shopping not so much,” clarified Andrea Pauly.

Before coming out, Andrea said they scoured the house for useable pens, notebooks, pads of paper, etc. left over from previous school years.

“We tried to go through the house to find things we need so we wouldn’t have to spend so much,” she said.

Jamie Pearson of Wichita was shopping with son Jon, a student at Woodland Health and Wellness Magnet. She said she expects to spend less this year on his back-to-school supplies.

Overall, she said, she is feeling less anxiety about her family’s finances this year in large part because she and her husband decided to forego buying a larger, more expensive house.

“We decided to just make do,” she said.

The year so far

Despite such evidence of tight-fistedness, local retailers have actually done pretty well in 2012. Sedgwick County sales tax collections through July, which reflect sales only through May, are up 4.4 percent over the same period of 2011, according to the Kansas Department of Revenue.

That follows a similar increase in 2011 over a miserable 2010, the low point during Wichita’s downturn.

The recession and uncertain recovery have pushed retailers to become more creative in marketing. Watermark Books recently had a sale of books aimed at teachers who want something to read to their classes.

“Sales have been up,” said owner Sarah Bagby. “Traffic has been great. The sale brought in a lot of people.”

But merchants have remained almost as tight-fisted as their customers. The number of workers employed by general merchandise retailers in the Wichita area continues to fall. There were 7,300 employees at general merchandise stores in June of 2008, 6,800 in June 2010 and 6,500 in June 2012, according to the state Department of Labor

Strong school sales predicted, but...

Ellen Davis, senior vice president of the National Retail Federation, said that in NRF’s back-to-school survey, shoppers said they would spend 14 percent more this year, but she said it doesn’t reflect an economic rebound.

“It was surprising,” she said. “We felt there was something going on behind it. If you look at consumer confidence, and income growth and unemployment, you know a rising economy can’t be causing it.”

She said the spending bump appears to be caused by continued growth in the overall student population nationwide. It’s also, she said, caused by parents finally replacing clothes and backpacks worn out from previous years.

There has been some evidence supporting predictions of strong sales in August and September. Many retailers who report monthly numbers showed solid increases in July.

But some analysts doubt results will be as strong as suggested by the NRF survey. In a note to investors, Citi analyst Deborah Weinswig forecast sales at established stores to be flat to up 2 percent for the August-to-September period. Not including the 2009 season, Weinswig said that would make it the weakest season since 1997. The forecast is also well below the 10-year average of 4.4 percent growth, she said.