Concerns about the economy have pushed parents to cut back on back-to-school spending for K-12 students this year, a recent survey said.
Overall, parents said they would trim spending budgets on back-to-school items by 10%, spending an average of $597 per student, according to the Deloitte survey.
Reining in budgets comes as the prices of school supplies surged by roughly 24% in the last two years. For many parents, sticking to the slimmer budget means focusing on replenishing essentials like school supplies while holding off on nonessential purchases like tech and apparel, the survey said.
"Although parents were willing to endure higher prices last year for replenishing BTS items after the pandemic, 18 months of inflation have changed their tune," Deloitte said. "Uneasiness about the economic situation is creating price sensitivity and causing parents to reassess how they'll approach shopping for the upcoming school year."
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Inflation is the top reason parents across all income classes said they planned to cut back-to-school spending, the survey said. Thirty-one percent said their households are in a worse financial situation than they were last year, and 51% expect the economy to weaken in the next six months.
In June, the annual inflation rate dropped to 3% – its lowest level in more than two years, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS). Still, even with improving inflation, prices remain elevated across many areas of the economy – including school supplies.
Parents want to economize and are looking for deals to maximize their spending this year, Deloitte said. Additionally, 59% said they planned to complete expenditures by the end of July, and 77% said they would pay with cash.
"Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods," Nick Handrinos, the head of Deloitte's U.S. retail and consumer products division, said in the report. "Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed.
"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," Handrinos continued.
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Back-to-college spending, however, is forecasted to see big growth this year, despite rising prices, according to a survey by the National Federal of Retailers (NFR) and Prosper Insights & Analytics.
College students and their families are expected to spend an average of $1,366.95 per person, an increase from $1,199.43 last year and a new record. Since 2019, back-to-college spending has nearly doubled, the survey said.
"Even though consumers plan to spend more on school and college-related items this year, they are still looking to find the best value and deals," Prosper Executive Vice President of Strategy Phil Rist said. "Consumers are stretching their dollars by comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than last year."
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