Consumers are still seeking value as kids begin to trudge back to school. While the retail sector, along with related exchange traded funds (ETFs), should be content with shoppers coming back, stores are now vying for their share of the clientele in a heavily marked-down price war.
A variety of sellers are engaged in aggressive pricing and advertising extensively, reports Mary Ellen Lloyd for The Wall Street Journal. Companies targeting back-to-school shoppers include drugstores, discounters, club stores and office supply chains.
Research consultancy Brand Keys estimates that consumers will spend 10% less year-over-year, or an average $531, on back-to-school shopping, writes Aaron Baar for MediaPost.
A survey of 10,000 U.S. households with school-age children revealed:
- An average of $275 will be spent on clothing. Shoe purchases will be down 10% from last year to an average $105.
- Supplies will be $95, or down 5%. Books and study aids will be $20, down 25%.
- Purchases of “luxury” items such as computers, software and printers will drop 11% to $189.
- 95% of participants say they will be visiting discount retailers for their back-to-school shopping, up 12% from last year.
- 55% prefer department and office supply stores, up 10%. 50% cited online shopping, up 25%. 30% will be seeking specialty outlets, down 6% from last year.
- For discount stores, Wal-Mart (WMT) remains popular, enticing 70% of consumers, up 10% from last year. 50% cited Target (TGT). 40% preferred Kmart, down 5%.
- For department stores, Kohl’s (KSS) is the consumers’ choice with 40%, up 15 from last year. 35% cited Macy’s, down 5%, and Dillard’s (DDS). 30% of participants preferred Sears (SHLD), up 5%.
SPDR S&P Retail (XRT): up 47.6% year-to-date
For more information on the retail sector, visit our retail category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.