Jul 12, 2023
With inflation still impacting everything from lunchboxes to lunch supplies, many American parents may be planning to scale back on their annual back-to-school hauls this year.
Deloitte just released its 2023 back-to-school survey, and the report forecasts total spend will drop 10% to $597 per child this year — the first decline since 2014.
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The K-12 back-to-school market is set to decrease 9% to $31.2 billion.
"With budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families,” said Nick Handrinos, Deloitte vice chair and U.S. retail consumer products leader, in a press release.
Handrino says parents will likely be strategic and hold off on some purchases, like clothing, while still renewing their essential school supplies.
“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," he adds.
Parents are feeling financially stressed
Although inflation cooled to 3% last month, prices are still stubbornly high and constraining parents’ wallets. In fact, there’s been a 23.7% increase in the cost of school supplies over the past two years, based on Deloitte’s analysis of Bureau of Labor Services data.
The report also revealed that 3-in-10 households say they’re in a worse financial situation than last year, half expect the economy to weaken in the next six months. And it couldn’t come at a more challenging time, as U.S. household debt hit a record $17 trillion. On average, consumers owed $986 billion on their credit cards in the first quarter of 2023, the New York Fed revealed in May.
And across all income groups, shoppers told Deloitte they’re planning to spend less on back-to-school supplies, with many blaming higher prices or reduced disposable income.
As a result, over a third are now postponing shopping nonessentials — prioritizing school supplies over tech and clothing.
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And with interest rates up, more families are also planning on using cash as opposed to relying on credit.
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Look for summer deals and sales tax holidays
While the majority of shoppers are choosing to venture into stores in search of better bargains, some are also looking online. And 62% of those who use social media are also using it to track down deals, compared to 56% last year.
Choosing stores with friendly customer service policies is also important to Americans — nearly 3 in 5 say they’re sticking to retailers with free return policies, while those shopping digitally are keeping their eyes peeled for low purchase thresholds to score free delivery.
Although Amazon’s Prime Day ends today, there are plenty of other sales to take advantage of before September.
Walmart recently announced it will be holding supplies, like notebooks, crayons and backpacks, at last year’s prices. (Which, considering inflation was 8.3% last August, isn't likely to make a huge difference for consumers — but it is something.) And aside from Target Circle Week (which ends on July 15), the retailer is also featuring 20% discount events for teachers and college students from July 16 to Aug. 26.
Depending on what state you live in, you may be able to take advantage of some tax-free events on clothing, school supplies and tech as well. Just keep in mind that different exclusions or price limits may apply.
State sales tax holiday dates
Here's a list of the state sales tax holidays still to come this summer:
- Alabama: July 21–23
- Arkansas: August 5-6
- Iowa: August 4-5
- Maryland: August 13-19
- Mississippi: July 28-29
- Missouri: August 4-6
- New Jersey: August 26-September 4
- New Mexico: August 4-6
- Ohio: August 4-6
- Oklahoma: August 4-6
- South Carolina: August 4-6
- Tennessee: July 28-30
- Texas: August 11-13
- West Virginia: August 4-7
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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
