The average family is likely to shell out even more for new clothing, electronics and dormitory supplies for the coming school season, even as higher energy prices have crimped spending in other areas, according to a retail survey.
Soaring gas costs and uncooperative weather limited consumers’ trips to the mall in June, but parents will not hold back when it comes to their kids, said Scott Krugman, a spokesman for the National Retail Federation, which commissioned the survey.
Demand for electronics in particular will drive spending, according to the survey of about 9,000 consumers.
That could be good news for one-stop shop retailers such as Target Corp. and Wal-Mart Stores Inc., which have reported slowing sales growth. Big-box electronics companies, such as Best Buy Co. Inc., or Circuit City Stores Inc. could also benefit.
“When it comes to spending for their child, gas prices take a back seat,” Krugman said. “The fashion and apparel merchandise that kids and parents are seeing, they like. And as the computer plays more of a role in the classroom, there’s more of a need to have that equipment at home.”
NRF released the survey’s findings on a day Target cut its July sales forecast and the S&P retail index hit a 14-month low as consumer-related shares tumbled on fears inflation and conflict in the Middle East will hurt consumer spending.
Still, spending by the average family with school-aged children is expected to rise 19 percent to $527 from $444 in 2005, according to the survey conducted for the NRF by BIGresearch from July 5-12.
“Retailers have been very aggressive in pushing out back-to-school promotions and merchandise,” Krugman said to explain the jump in spending forecasts. “We’ve seen consumers hold back over the summer and you might see some pent-up demand for merchandise after the numbers in June.”
Total spending is estimated to soar 31 percent to $17.6 billion, up from $13.4 billion last year, driven by huge demand for gadgets, including personal computers, iPods and mobile phones.
If the data hold up, it could suggest a better end-of-year holiday, Krugman said.
“For apparel and electronics (back-to-school) is a bellwether for whether or not they have the right merchandise in stock,” he said. “We’ve seen this time and time again -- if it’s important to consumers, they’re going to spend. We’re going to see this during back to school and we’re going to see it during the holiday season.”
