While children are enjoying the last few days of summer, parents are gearing up for back-to-school season, specifically back-to-school shopping. According to the National Retail Federation (NRF), back-to-school and back-to-college shopping are some of the top spending events for consumers in the U.S. However, the economic realities of 2024 may change this longstanding trend.
Last year, in fear of inflation and increasing costs of living, families reportedly planned on shifting their spending habits when shopping for the new school year. However, despite the reported focus on necessities, the market made $31.9 billion from back-to-school shopping due to the increased prices of those items, according to Deloitte.
This year, Deloitte’s annual back-to-school consumer study, which surveys nearly 1,200 U.S.-based parents of school-aged children in grades K to 12, anticipates that spending habits will remain the same as families continue to grapple with the cost of living. The survey predicts parents will spend $586 on average per student — $11 less than in 2023, but $57 higher than spending in 2020.
“We expect back-to-school spending to be flat to down modestly when adjusted for inflation, mainly driven by middle-income families juggling financial priorities and ongoing inflation perceptions,” Stephen Rogers, managing director at Deloitte Insights Consumer Industry Center, Deloitte Services LP, said in a press release. “Retailers can expect headwinds to volume and loyalty as consumers seek to save money. However, wanting to please their kids, retailers will likely have opportunities to harness the indulgences parents are willing to make.”
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In light of these financial concerns, Deloitte’s surveyed parents planned to decrease spending on technology products and prioritize shopping with retailers offering “value and convenience” as a means to stay within their budgets. However, with the costs of school supplies reportedly increasing by 24.5% over the past four years, per the Bureau of Labor Statistics’ Consumer Price Index, some parents are sacrificing in other areas to afford back-to-school shopping.
In a study conducted by Qualtrics on behalf of Credit Karma, parents with children under 18 say they will “spend more money on back-to-school shopping this year” than in previous years. So much so that 60% of Gen Z parents and 56% of millennial parents reported sacrificing spending on necessary expenses like groceries or bills to ensure they can afford their children’s back-to-school necessities. The study also found that 33% of parents reported being willing to sacrifice their retirement and savings, going on vacations (47%), eating out (51%) and living in preferred neighborhoods (19%). Similarly, Deloitte’s survey found that 64% of low-income earners, 57% of middle-income earners, and 39% of high-income earners plan to cut back on other expenses for the sake of back-to-school season.
“Education costs are primarily spotlighted at the college and post-college levels, yet parents are on the hook for school-related expenses as early as pre-K” Courtney Alev, consumer financial advocate at Credit Karma, said in a statement. “Many parents with young children are likely entering the school year already stretched thin after covering costs for summer childcare, which could be why many parents expect to be in [debt] after back-to-school shopping this year.”
While parents reported forgoing necessities to afford back-to-school shopping, 85% of Deloitte’s surveyed parents said they would splurge on their child’s must-have back-to-school products. Regardless of whether they are willing to splurge ahead of the new school year, both studies found that parents plan to prioritize deals when shopping. According to Credit Karma’s study, 53% of parents shopped Amazon Prime Day sales for school supplies, and 61% plan to shop for items at discount stores like Dollar Tree and Dollar General. Additionally, parents reported using hand-me-downs and reusing items from the year before.
