Rekubit Exchange:Back to school 2023: Could this be the most expensive school year ever? Maybe

• This could Rekubit Exchangebe the most expensive back-to-school shopping season ever, the National Retail Federation projects.
• Spending on the return to classes could surpass $135 billion, $24 billion more than in 2022. But not all estimates are that high.
• Complicating projections of back-to-school spending is inflation, consumer resilience and students' needs for more items.

If you're a bit more cost-conscious this back-to-school season, you are not alone.

Higher prices, due in part to inflation, and longer shopping lists have many parents choosier about what they buy, how much they spend and where they shop, experts say.

What experts disagree on is how the back-to-school shopping season will shake out. The National Retail Federation predicts 2023 will be the most expensive back-to-school shopping season ever. Overall spending is expected to surpass $135 billion, an increase of more than $24 billion from the previous year, according to data shared by the trade organization based on a survey of more than 7,800 consumers between June 30-July 6.

Consulting firm Deloitte has a different take, projecting a decline of 10% from last year in total spending for families with K-12 students, based on its survey of 1,212 consumers conducted May 26-June 1, and census data. "With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families," said Nick Handrinos, the consulting firm's vice chair and U.S. retail, wholesale and distribution and consumer products leader.

"Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods," he said in a statement accompanying the firm's report. "Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed."

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How much will we spend on back to school in 2023?

Deloitte projects an average spending per child of $597, compared to $661 in 2022. In contrast, the National Retail Federation estimates families with children in elementary through high school plan to spend on average $890.07, about $25 more than last year and a new record.

Families with college students are expected to spend in record numbers, too. The NRF estimates an average of $1,366.95 per person, more than $167 higher than last year.

Why the differing projections? Back-to-school shopping comes at a time of uncertainty in retail. Consumer spending, which makes up about 70% of economic activity, grew a modest 1.6% in the April-June 2023 period, following a 4.2% advance the previous three months, the Commerce Department reported last week.

Sales on apparel, electronics and other back-to-school staples have struggled recently, said Zak Stambor, an analyst with Insider Intelligence in a recent podcast discussion. The research firm's forecast? Back-to-school retail sales up 2.9% this year, totaling nearly $72 billion.

"In terms of how consumers spend, I think what we'll see is just people are looking for opportunities to save and they will seize upon those, but they're not going to be pulling back entirely," Stambor said.

Shopping for back-to-school clothing a must for most

For back-to-school shoppers, clothing and shoes are the top expected shopping categories with 95% in the market for clothing and 94% for shoes, according to the NRF survey. Clothing and accessories topped the list for back-to-college shoppers, with 86% expecting to spend.

All of these expected purchase rates are higher than the pre-pandemic year of 2019, according to NRF data. "People are spending more on these key categories, but the other driver is that more people are buying them," said Katherine Cullen, vice president of industry and consumer insights for the National Retail Federation, during the group's recent presentation of back-to-school findings. "So, we see an increase in the percentage of shoppers who are purchasing in each of these key categories."

The early back-to-school shopping spree has already begun. A snapshot from Amazon Prime Day shopping (July 11-12) found that 24% of shoppers bought apparel and shoes – behind only home goods (28%) and household essentials (26%), according to data from Numerator’s 2023 Live Prime Day Tracker based on more than 1,800 verified buyer surveys.

Similarly, Adobe data on Amazon Prime Day sales for the two-day event found sales of apparel up 17%, compared to average daily sales in June 2023. Stationery and office supplies were up 76%, driven in part by back-to-school shoppers, according to Adobe Analytics.

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Electronics: Pricey but pivotal for students

Electronics are another important category for back-to-school shoppers with 69% saying they would be purchasing, the NRF survey found.

Consumers said they expected to spend more on electronics across all ages, with spending on electronics for K-12 students up 11% to $326 from $293 a year ago. Electronics spending for back-to-college students rose 12% to $337 from $300 a year ago.

Laptops, tablets, calculators, electronics accessories, headphones and speakers, and smartphones are the products most shoppers are looking for, according to the NRF survey. During Amazon Prime Day, about 18% of shoppers bought electronics, according to Adobe.

"We know the pandemic changed a lot when it came to learning environments and …. the types of products people needed," Cullen said.

Most back-to-college shoppers (61%) also said they expected to spend on dorm and apartment furnishings. "The real driver of their intended budget is they need more new items," Cullen said. "There’s an increase in the percent of people who say they need more big-ticket items, those electronics and dorm furnishings.”

Where to find back-to-school deals:Discounted shopping at Target, Walmart, Staples and more

Discount shopping part of the back-to-school strategy

With longer shopping lists and, in some cases, higher prices, more shoppers are perusing discount retailers. One-third of shoppers (33%) surveyed said they would shop at discount stores. That's up over the last three years, but not has high as during the Great Recession (from December 2007 to June 2009) and its aftermath, when at least half of shoppers said they shopped at discount stores.

"Consumers are looking for value. They are shopping around, but they’re not feeling sort of pushed into discount channels," Cullen said. "It’s an option for them that they are going to use."

Shoppers also said they were more likely to comparative shop online, shop more sales and buy more store brand and generic items than in the past, the survey found.

For retailers, the good news is that consumers are shopping. And if they are in the market, they may even spend more than expected. That's because nearly 60% of parents say they would be willing to spend more than planned for the right reasons, like treating their child or allowing their child to express themselves, Deloitte found in its survey.

"It’s not all bad news for retailers with many parents willing to splurge on certain items to treat their children, which may provide an opportunity for retailers," Deloitte's Handrinos said.

Follow Mike Snider on Twitter: @mikesnider.

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