Healthy back-to-school shopping could be good sign for holiday season
Analysts say 5% rise in August at chain stores indicates consumer fervor
September 5, 2014 12:00 AM
Tabitha Jermyn, left, reaches for some last-minute school supplies at Target in East Liberty as Lauren Klingman looks on.
By Teresa F. Lindeman / Pittsburgh Post-Gazette
The 2014 back-to-school shopping season is getting decent grades, with a trade group Thursday reporting August sales at U.S. chain stores rose almost 5 percent over the same month last year.
That could be a good sign for the coming holiday season, where consumers’ willingness to buy is not a given. Analysts continue to watch unemployment rates, consumer confidence figures and other data for signals on how much shoppers will be willing to spend on presents.
The back-to-school shopping season typically represents the second biggest of the year, and the International Council of Shopping Centers, which reported the 4.8 percent August sales gain Thursday based on comparable store sales results from 11 major retailers, said consumers are spending more on school items than last year. Comparable store sales only reflect stores that have been open at least a year.
Total sales in the month rose 6.3 percent, the trade group said.
“With the back-to-school shopping season coming to a close, sales posted a very strong gain, with apparel stores closing out the month at their highest year-over-year gain in four months,” said Jesse Tron, a spokesman for the New York-based trade group. “It’s a great indicator that consumers are ready and willing to shop as the economy continues to improve.”
The trade group is forecasting September sales, also calculated based on publicly released results for 10 chain stores, will rise between 4 and 5 percent.
The National Retail Federation earlier this summer projected the average family with children in the elementary to high school range would spend 5 percent more than last year between July and Labor Day, but overall spending in that age group would drop slightly to $26.5 billion because there are fewer children in households.
Older students heading off to college account for more overall dollars, as evident in the retail federation’s estimate that combined spending for back-to-school and back-to-college spending would hit almost $75 billion.
Only the holiday shopping season accounts for a bigger contribution to retailers’ revenues.
Marshall Cohen, chief industry analyst at Port Washington, N.Y., research consulting firm NPD Group, wrote last week that consumers were buying school supplies first and putting fashion picks off until later. “They want to find out what’s ‘cool in school’ before making their purchases,” he said.
Others agreed that clothing sales may stretch out over a longer period.
“We would expect a smaller wave of back-to-school traffic after Labor Day as teens look to see what other teens are wearing and shop again after school has officially started,” wrote Adrienne Tennant, an analyst with Janney Capital Markets in New York, in a report issued Thursday.
Ms. Tennant thinks teen retailers such as South Side chain American Eagle Outfitters may be ready for those coming back and looking for new reasons to buy clothes, something that they didn’t do so well last year.
“We believe new fall flows show ‘newness’ and give shoppers a reason to replenish their closets this fall season,” she wrote. “Upcoming fall trends include the jogger plan, distressed denim, fit and flare, oversized sweaters/cardigans and leather.”
In the overall back-to-school picture, school supplies and electronics were expected to drive the main sales increases anyway. The retail federation had projected, based on a survey done in July, that families with students in kindergarten through 12th grade would spend 7 percent more on electronic items than last year. And school supply spending was expected to rise 12 percent, driven in part by school districts asking for more classroom contributions.
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