Aug 3, 2011
"I was a little surprised about how long the list
was. There were things I didn't expect," said Angie Brady, a
resident of Decatur, Georgia, who has two young school-age
children.
"I'm hoping to be able to find better deals. I'll look for 2-for-1s
and things on sale, but I'm also going to look for quality stuff at
a good price," Brady said.
Many parents are even becoming "brand-agnostic" in their search for
bargains.
They are now willing to venture beyond traditional back-to-school
destinations such as office supply stores and specialty apparel
chains, and open to shopping at mass merchants, drugstores, dollar
stores, online stores and pretty much anywhere else where they can
find decent bargains.
For U.S. retailers, the back-to-school season is the second-biggest
selling period of the year after the December holiday season. The
season has important implications as consumer spending accounts for
about 70 percent of the U.S. economy, which barely grew in the
first half of 2011.
The season typically runs from late July into early September as
students gear up for the upcoming school year.
Susan Rau, 42, who was shopping for her twin sons at a mall in
Hollywood, California, said she will buy more store brands and shop
at department stores this season.
"They don't really need that much and they're growing so fast, I'm
gonna wait till when they actually need it."
EARLY DEALS
Retailers are not waiting, though.
"Retailers are starting to advertise for back-to-school earlier and
earlier. They are trying to make sure they are top-of-mind of
consumers," said Anthony Chukumba with BB&T Capital Markets.
"We are going to see some real kind of blockbuster, traffic-driving
deals just to try to pull the customers into the stores."
Rhonda Douma, who was shopping for her 3-year-old daughter at
American Girl in another mall in California, also plans to chase
the bargains.
Her top destinations for the season highlight the price sensitivity
of the post-recession American shopper.
"Usually it's Wal-Mart and Target and Marshalls,"
said Douma. "We just found out about this store (Marshalls), and they
have a lot of cute, fun stuff -- and brand names for cheaper
prices."
Office supply
stores are already feeling the pinch.
"While it is early in the
back-to-school season, we have seen softer traffic trends versus
the prior year," OfficeMax Chief Executive Ravi Saligram
said on Tuesday.
"We have targeted our assortments and promotions to an extremely
value-conscious consumer in a highly promotional retail
environment," Saligram added.
Larger rival Staples Inc is touting everything from a $10 savings
pass that lets shoppers save 15 percent on supplies throughout the
season, to a ream of paper for 25 cents.
"The customer is very demanding right now," said Demos Parneros,
president of U.S. retail for Staples. "They want deals, special
offers, special pricing. They don't want to overpay."
From Staples to Sharpie maker Newell Rubbermaid, companies are
planning on little help from the economy in the crucial selling
season.
"We would love upside. But we can't count on it. So our plans don't
have any upside from the economy in them," Parneros said. "So if
things stay the way they are, how are we going to win more
customers? How will we get more customers to come to the store? The
answer is steady diet of deals."
Data from Experian shows that back-to-school campaigns with an
offer had 69 percent higher transaction rates than those that did
not feature a deal.
SCHOOL DISTRICTS, ECONOMY SQUEEZING PARENTS
Many school districts with strained budgets are requiring parents
to supply more and more items that in the past would have been
purchased by the schools, including basic items such as paper
towels and hand sanitizers.
"That list just continues to get longer. (With the) sort of economy
that we have been in for the past two-and-a-half to three years,
that is becoming a way of life," Kmart's chief marketing officer,
Mark Snyder, told Reuters.
The result is more pressure on parents already struggling to make
household budgets work.
"Where we live, in our school district, you can ask the parents to
do that. But there are districts where they just can't afford
that," Rau told Reuters. Rau lives in Leesburg, Virginia, and was
visiting California.
About 65 percent of parents surveyed by America's Research Group
said they did not plan to spend more this season.
"Necessity, not desire, will drive this year's back-to-school
season purchases," said Janet Hoffman, managing director of
Accenture's Retail practice.
(Reporting by Dhanya Skariachan in New York, Joe Rauch in
Charlotte, North Carolina, Mary Slosson in Los Angeles, Alistair
Barr in San Francisco and Jessica Wohl in Chicago, editing by
Matthew Lewis)