While the numbers, reported yesterday, offer encouraging signs for the second-biggest shopping period of the year, there are concerns that shoppers will stick to the habits of the Great Recession by focusing on necessities and waiting for sales. That could be a big problem for retailers, which are raising prices to offset rising fuel, labor, and other production costs.
“Early going, July looks like it’s shaping up to be a solid month despite all the economic headwinds,’’ said Ken Perkins, president of RetailMetrics LLC, a research firm. “But the concern is whether shoppers will buy back-to-school items at full price.’’
The season accounts for 16.1 percent of annual retailers’ revenue, according to the council. It’s also an opportunity for retailers to gain insight into consumers’ shopping habits heading into the biggest shopping season of the year, which starts on the day after Thanksgiving.
Retailers will get a better sense of how consumers are spending in August, when the bulk of the purchases are made. But so far, analysts and retail trade groups are sticking to their forecasts, ranging from unchanged to up 3 percent compared with a year ago. The National Retail Federation expects families to spend $603.63 on back-to-school items, from clothing to supplies, down slightly from last year’s $606.40.
The concern is that while the recession officially ended in June 2009, many shoppers, particularly in the low-to-middle income bracket, feel like it never ended. For many, wage gains have not kept pace with higher costs for food and gas. Home values remain depressed, and companies are not hiring.
Adding to that, this fall shoppers will face higher price tags as retailers try to pass on higher labor costs in China and higher prices for raw materials.
Surveys from the National Retail Federation, Deloitte LLP, and others show that customers plan to buy only what the family needs, focus on fat discounts, and reuse last year’s items.
