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Eye on Retail: ‘Meaningful slowdown’ in 2019 back-to-school sales

BY Marianne Wilson

A new report indicates that retailers shouldn’t expect a big jump in 2019 back-to-school sales over last year.

Coresight Research’s “US Back to School 2019: Retail Outlook” report forecasts a 2.0% to 2.5% year-over-year increase in back-to-school retail sales this year (the metric reflect total sales by nonfood retailers from July to September). The estimate represents a meaningful slowdown from last year, when nonfood retailer sales grew 4.4% in the same period, according to Coresight Research.

“Our estimates are informed by June survey data from Prosper Insights & Analytics, which finds that only 17.1% of back-to-school shoppers expect to spend more this year than last, while some 60% say they will spend the same amount,” the Coresight report stated. “Last year we saw a net 22.8% of back-to-school consumers expecting to spend more, which is higher than this year’s number, indicating a slowdown in spending growth for 2019.”

A mixed economic backdrop frames this year’s back-to-school shopping season, according to Coresight. While higher wage growth and lower gas prices point to the potential for higher sales, nonfood retailer sales have risen just 3.2% year to date (through June), a significant slowdown from the 5.1% growth in the first six months of 2018. Total retail sales growth has slowed this year, too: In June 2019 (latest), total retail sales grew by a modest 2.1% year over year. In June 2018, sales were growing at double that pace.

Here are some other highlights from the Coresight Research report.

• The biggest category for back-to-school spending is clothing and accessories, with expected per-household expenditure of $239.82, followed by electronics at $203.44. Shoes and school supplies are expected to reach $135.96 and $117.49 per household, respectively. Spending on electronics during this season will increase from $187.10 last year but remain slightly below the $204.33 seen in 2017.

• Electronics is the biggest category for spending by college students and their families, at an estimated $234.69 per household, around $5 more than last year. Purchases of dormitory and apartment furnishings is forecast to increase almost $11 to $120.19, but spending on clothes will decline to an average of $148.54 from last year’s $153.32

• Same as last year, the department store remains the top destination for back to school shopping, although the proportion of respondents saying they will shop there declined 4.7 percentage points year over year to 52.5%. However, discount stores overtook online as the second biggest channel with 50.1% expecting to shop at discount stores. According to Prosper’s survey, rates of online shopping are set to be around seven percentage points lower than last year, at 48.8% of shoppers.

Click here to read the full report.

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