### Americans Face Second-Highest Spending on School Supplies
#### Inflation Pushes Average Family to Spend Over $870
Last year, American consumers spent a significant amount on back-to-school shopping, reaching a record $41.5 billion, according to estimates from the National Retail Federation (NRF). This enormous figure, averaging more than $890 per household, surpassed the all-time high of 2021 by about 12%. While rising prices certainly played a role, optimism fueled by a strong job market, slowing inflation, and a resilient U.S. economy also contributed.
This year, however, consumers are showing more restraint. Despite the near-end of higher-than-usual inflation, consumers have pulled back after feeling the compounded effects of rising prices and facing the economic slowdown that, although expected, is fueling uncertainty.
Still, with inflation high and the cost of all goods and services remaining elevated, the NRF anticipates that back-to-school spending in 2024 will be the second-highest on record, at $38.8 billion, or $874.68 per household.
#### Tightening the Budget
In a recent research note, Mark Mathews, Executive Vice President of Research at the NRF, said, “There still appears to be a strong intention to go out and spend.” He added that people have simply become “highly price-conscious.” Mathews noted that Americans are hunting for bargains and cheap supplies, and items like stationery, clothing, and electronics typically fall under discretionary spending at any other time of year.
Overall, discretionary and larger expenditures have seen some of the biggest declines amidst the spending slowdown. However, back-to-school shopping has become more costly in the face of high inflation. Mathews explains, “Back-to-school is not a discretionary event… It’s truly essential spending… If you’re sending your child to college, you have to buy furniture… You have to buy shoes because kids keep growing.”
While consumers cannot cut back on essential spending, they can trim it. Recent surveys show that around 41% of respondents are actively seeking deals. “Consumers are definitely looking for sales,” Mathews remarked. “Retailers understand that price-conscious consumers mean you really have to be promotional.”
#### Higher Than Usual
According to CNN, changing waves of inflation are likely to influence these trends. While the rate of price increases has remained above normal, service-based categories—especially those related to housing—have exerted the most upward pressure, as evidenced by Consumer Price Index data.
More streamlined supply chains and consumer shifts toward spending on services and experiences have helped goods categories see either a decline in inflation (price increases but at a slower pace) or even deflation (price decreases). However, retail prices are expected to decrease by 0.7% this year, after rising by 5.9% in 2022 and 0.6% last year, according to a recent analysis by economists at S&P Global Market Intelligence.
Monthly retail tracking data from Circana shows that some commonly purchased school supplies are indeed cheaper than last year, with some even priced lower than in 2019. Paper prices have dropped by 20%, while crayons and pencils have decreased by 19% and 13%, respectively. The data also revealed that crayon prices have fallen by 7% since 2019, though other categories are still at least 11% higher than they were before.
by/radwa sherif ✏️✏️📚