Retailers, consumers and prices
Check out back-to-school spending trends.
Joe High School may have every right to be jealous of his younger siblings during this back-to-school shopping season, according to a survey conducted by PriceGrabber.com, a part of Experian.
Consumers plan to buy more gadgets — laptop computers, cell phones and other accessories — for elementary school students, almost doubling spending in some cases, while the rate of growth is expected to be lower if not negative for many high schoolers, according to the “Back-to-School Shopping Consumer Behavior Report.”
“Laptops and other electronics are the most expensive items on most back-to-school shopping lists. The increase in gadgets purchased for elementary school students has forced parents to increase the overall budget at an earlier age,” Barbary Brunner, chief marketing officer at PriceGrabber said in a statement.
“However, the survey data implies that while some parents are purchasing laptops and electronics for high school students, other parents are forgoing the purchase of the latest and greatest new technology for high schoolers who already have late-model devices,” she added.
Meanwhile, 45 percent of those surveyed will spend the same amount as last year on back-to-school shopping and 14 percent will spend more, according to PriceGrabber.
Two leading U.S. retail industry groups previously said parents and students will be spending more this year on back-to-school items.
The number of consumers buying their wide-eyed elementary-aged child a laptop is 15 percent, up from 7 percent last year, while plans to purchase a cell phone hit 10 percent from 6 percent last year, according to the PriceGrabber study.
The laptop purchase rate for high schoolers rose, but to a lesser degree, going up to 25 percent from 22 percent last year, according to the study. And forget cell phones as that rate fell to 12 percent from 15 percent last year.
High schoolers (9th through 12th grades) also come up short in the budget planning as only 50 percent of consumers surveyed plan to spend more than $250 on that group, compared with 52 percent for elementary kids (kindergarten through 5th grades), 62 percent for middle schoolers (6th through 8th grades) and 67 percent for college and junior college students, according to the study.
The survey was conducted online from May 12 to June 1 with 1,718 consumers.
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Check out the decline in weekly U.S. same-store sales gains.
After two consecutive weeks of strong positive weekly sales gains, retailers saw their sales take a breather with a 1.5 percent decline in the week ending July 10, according to the International Council of Shopping Centers and Goldman Sachs.
Sales in the weeks ending July 3 and June 26 rose 1 percent and 2.1 percent, according to the report.
On a year-over-year basis, sales also slowed to 3.2 percent, but continued to remain positive.
“Sales showed a mixed performance over the past week as the seasonally-adjusted year-over-year pace continued to rise — although the unadjusted pace was much stronger due to the holiday-sales lift from a calendar shift when the Independence Day federal holiday was celebrated in 2010 and 2009,” ICSC chief economist Michael Niemira said in a statement.
The ICSC reaffirmed its outlook for July U.S. same-store sales to increase in the range of 3 percent to 4 percent, compared with a 5 percent decline last year.
However, U.S. retailers relied heavily on promotions to boost June sales, suggesting profit margins may suffer as they head into the key back-to-school shopping season.
The Weekly Chain Store Sales Snapshot is produced by the ICSC and Goldman to measure U.S. same-store sales, excluding restaurant and vehicle demand, and represents about 75 retail chain stores.
Meanwhile, Goldman analyst Michelle Tan said in a separate research note that there are few reasons to buy stocks in the apparel retail sector assuming a slow recovery. It cuts its 2010, 2011 and 2012 profit estimates by an average of 7 percent.
“In a slow recovery with little sequential improvement in employment, sector sales have averaged less than 2 percent with flattish margins; this implies about 9 percent risk to Street forecasts,” Tan wrote. “History suggests downside risk to estimates in a double-dip scenario is roughly two times the upside in a robust recovery.”
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Check out the latest celebrity designed clothing line.
Spears, whom Forbes magazine once ranked the most powerful celebrity in the world and still ranks No. 6, has designed her first collection of clothing and accessories for Iconix Brand Group’s Candie’s brand, for which she has been the face the past three seasons.
Many states that levy sales tax on clothing offer a short break on the tax in the summer, which, in turn, spurs back-to-school shopping.
Ten states, including Virginia, offered shoppers a chance to buy tax-free last weekend, with most states offering a tax break on clothing up to $100 per item, FBR Capital Markets noted in a new report.