MARK-TO-MARKET: Families tighten budgets for back-to-school shopping season

But the back-to-school season also carries substantial economic weight. It is one of the retail industry’s largest shopping events. The annual shopping extravaganza encompasses both back-to-school spending (for kids in grades K-12) as well as back-to-college spending. It is second only to the November-December holiday shopping season which totaled a massive $964.4 billion in sales in 2023.

This season, 34% of all U.S. adults are expected to stock up on clothing, supplies and other essentials for the upcoming school and college year. But concern over a cloudy economic outlook has many Americans tightening up their pocketbooks. This year, the National Retail Federation (NRF) expects U.S. consumers to spend $38.8 billion on back-to-school shopping for their K-12 children. This is down 6.5% from last year’s total of $41.5 billion. Likewise, back-to-college spending is expected to reach $86.6 billion, down 7.9% from last year.

According to the NRF, on average, each family is expected to spend $874.68 on back-to-school items for their K-12 children. Among their top purchases, shoppers will spend an average $309.35 on electronics, $253.29 for clothing & accessories, $141.62 for school supplies and $170.43 for shoes.

College students and their families are expected to spend even more ($1,364.75) for the upcoming school year. On average, back-to-college shoppers will spend $359.49 on electronics, $192.40 on dorm or apartment furnishings, $171.06 on clothing & accessories and $112.60 on shoes. Surprisingly, funding for “beer” wasn’t included in the NRF’s back-to-college spending analysis.

One of the main trends this season is consumers getting an early start for their back-to-school shopping needs. According to the NRF, more than 55% of back-to-school shoppers started their shopping in early July. 25% say they started shopping in early June. Among those early shoppers, 65% state it helps them spread out their back-to-school spending.

Shopping early also allows budget-conscious consumers to seek out the best deals. 85% of back-to-school shoppers took advantage of Prime Day, the national two-day shopping blitz that offers consumers significant online discounts and promotions. This year’s Prime Day was held on July 16-17. According to Adobe Analytics, U.S. retailers reported a record-high $14.2 billion in online sales during these 48 hours, up 11.8% from last year. The strong pace of sales was led by school-related items. Adobe Analytics reports spending on backpacks, lunchboxes, stationery and other supplies increased 216% compared to last year’s Prime Day event. Likewise, spending on kid’s apparel rose 165%.

If you haven’t started your back-to-school shopping yet, there are still many sales and discounts to be had. But try and stick to your budget. Remember, the November-December holiday shopping season is right around the corner.