Back-to-school season is the retail industry’s next big test
A huge windfall could be ahead for retailers: the sector is bracing for blowout spending during one of its biggest events of the year — back-to-school shopping, which is getting underway.
Why it matters: There was a hard split of fortunes between retailers who benefitted from the pandemic and those that got pummeled.
- How this season shakes out is the first big test for battered retailers hoping to rebound as normalcy returns.
By the numbers: New data from Deloitte shows back-to-school spending will top $32 billion for the first time in five years, per its annual back-to-school report.
- And school supplies(markets, binders, folders) could stage a comeback (+10%) after a 2020 drop-off.
- "We’re excited for a return to normal after all the craziness we’ve been through,” Laurel Hurd, an executive at Newell Brands — the maker of Sharpie and Paper Mate pens — told Bloomberg.
What they're saying: "How much will this back-to-school season kind of get juiced because parents weren't out there shopping for their kids last year — that's the big question," says Mitch Kummetz, a retail analyst at Pivotal Research.
That type of pent-up demand is just one factor that's worked in retailers' favor.
- In-person schooling will be back. And consumers are flush with cash — with more set to come down the pipe in the form of the child tax credit.
The big obstacle is whether shelves will be stocked — and how much more things will cost.
- Cargo has been tied up at overwhelmed ports. That is, if retailers are able to get inventory from overseas at all.
- "Retailers are telling us that ultimately June would have been even bigger for them if they had more product availability," says Kummetz