This summer, American parents are expected to spend $34.4 billion, or about $661 per child, on back-to-school shopping, according to a Deloitte survey. A big portion is going toward fashion: apparel sales are predicted to jump by 18 percent from the same period in 2021. It’s a 180-degree turn from last year, when parents splurged on laptops and other technology, while clothing spending remains roughly flat. In 2022, their kids may not need another new tablet, but they’ve outgrown last year’s shirts, shorts and sneakers.
The unusually unpredictable back-to-school shopping season is just the latest example of how the pandemic has radically changed what people want to buy, and when. Last year, consumers abruptly dropped their sweatpants obsession for going-out clothes and work-from-home wardrobes. Now they’re splurging on travel, luxury goods and children’s clothing.
Retailers are still catching up — and bracing for more surprises this fall.
Inflation is one area that’s especially hard to predict. A National Retail Federation survey found that 80 percent of back-to-school shoppers had noticed higher prices on clothing, but far fewer said they were cutting back on those purchases as a result (the opposite may be true; parents are more likely to clean out the kids’ section now if they’re worried those clothes will cost 10 percent more next year). The NRF did find, however, that back-to-school shoppers were choosing to reduce spending in other areas, or devote more time to bargain hunting.
Back-to-school shopping could be a last hurrah for retailers. Spending tends to peak in late July and early August. After that, the real effects of inflation and the slowing economy could become even more apparent. Walmart warned last week of slowing sales heading into the fall. The same Deloitte survey that found parents were going to spend big on their kids this summer found that 54 percent were pessimistic about the economy over the next six months. Retailers that ordered too much of the wrong inventory, or are worried they’ll be stuck with unsold goods and shrinking demand this fall, are rolling out some of the most aggressive discounting the industry has seen since the pandemic.
What to Watch This Week
Fashion is entering its usual August doldrums, after closing out July with earnings from most big European luxury brands, plus Walmart, Shopify and Amazon and a host of key data on inflation and economic growth on both sides of the Atlantic.
This coming week is lighter on bellwethers, with Adidas the biggest fashion company reporting earnings, and fewer major economic indicators. While the official calendar is light, we can likely expect more major retailers to announce layoffs, cut back on fall orders and issue profit warnings. Luxury brands are also solidifying their fashion week plans, and the September hype cycle should be kicking into gear soon.
Monday
Love Island airs its finale, ushering in a new generation of UK fashion and beauty influencers
Tuesday
The US Senate is expected to vote on major climate and health care legislation sometime this week. We’ll likely know by this point if all 50 Democratic senators are on board, or if negotiations will extend into August.
Wednesday
Revolve, elf and Hugo Boss report quarterly results
Thursday
Adidas reports quarterly results
Friday
US unemployment data for July released
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