Aug 5, 2022 - Economy

Inflation hits back-to-school shopping

Illustration of a chalkboard in the shape of an upward arrow.

Illustration: Allie Carl/Axios

As back-to-school shopping season picks up, families are grappling with higher prices on everything from backpacks to pencils thanks to surging inflation.

State of play: More than half of families are planning to cut back on back-to-school shopping this year due to surging inflation, according to a national survey from real estate and retail management firm JLL.

  • Parents with budgets significantly affected by inflation plan to spend 15% less on average.
  • One-third of parents who say their budgets won't be affected by inflation say they plan to spend 31.5% more than in 2021.

Between the lines: The price of school supplies is being impacted by high energy prices, increased labor and transportation costs as well as supply chain disruptions, said Patrick Penfield, professor of supply chain practice at Syracuse University’s Whitman School of Management.

What they’re saying: “Parents will experience sticker shock on clothing, sneakers and school supplies this year,” Penfield said. “Expect to see 'shrinkflation' with tissues, pencils, paper, markers, and many of your other school supplies.”

  • “With inflation impacting the overall price of goods and services, back-to-school shopping this year may feel more like holiday shopping,” Liz Ewing, chief financial officer of Marcus by Goldman Sachs, told Axios.

The big picture: Back-to-school spending is still expected to match last year’s record high of $37 billion with families planning to spend an average of $864 on school items, approximately $15 more than last year, according to the National Retail Federation's annual survey.

  • School spending has increased dramatically since the pandemic with the shift from virtual and hybrid learning, NRF said.
  • Families are expected to spend $168 more on average than they did on supplies in 2019 before the pandemic, NRF said.
  • Deloitte’s 2022 Back-to-School survey shows spending is up 27% from 2019 with clothing and accessories leading the increase.

Flashback: Last year, millions of families had help in preparing for the school year with the Child Tax Credit, which ended in December.

Tips to save on school supplies

A basket of roughly a dozen supply items showed a price increase of nearly 15% on average this year compared with last back-to-school season, according to retail analytics firm DataWeave, the Associated Press reports.

Meanwhile, more parents are looking to save this year with nearly 60% of shoppers saying they will look for sales and coupons including free shipping, according to JLL’s survey.

Here are a few ways to beat inflation:

Student discounts and rewards programs

Target and Bed Bath & Beyond both have a special discount for college students for a limited time.

  • The two retailers also both have free loyalty programs — Target Circle and Welcome Rewards — that offer savings for all shoppers.
  • Kohl’s, Macy’s, JCPenney, Old Navy and other retailers also have free rewards programs to earn money off future purchases.

What they're saying: "If there's a retailer you're planning to shop with for most of your back-to-school needs, make sure you're part of its rewards program," Kristin McGrath, a savings expert with RetailMeNot, told Axios.

  • "You can't change the price tag, but you can earn rewards to defray costs down the line."

Tax holidays offer sales tax break

The first weekend in August is the biggest for tax-free shopping throughout the nation with a dozen states holding sales tax holidays.

Shop clearance and overstock sales

Many retailers have excess inventory that they are trying to unload, which makes it possible to save by shopping the clearance rack.

Our thought bubble: An Axios reporter visited three South Florida Walmart stores as well as multiple Target, Kohl's, Macy's and JCPenney locations and found a large amount of clearance at all.

Labor Day sales

If you can hold off, wait to shop for clothes until Labor Day, RetailMeNot's McGrath said.

  • The holiday weekend is expected to be “a great time to do those bulk wardrobe-upgrade purchases,” McGrath said.

Go deeper: A dozen states have tax-free school shopping this weekend

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