Consumers making every back-to-school purchase count

As it did for Christmas, the recession grinch looks to steal the back-to-school shopping season.

The National Retail Federation is forecasting a 7.7 percent decline in consumer spending for school merchandise. The average family will spend $548.72 on students in kindergarten through 12th grade this year, compared with $594.24 in 2008.

Back-to-school spending is expected to reach $17.4 billion, the Washington, D.C.-based retail group estimated. Including back-to-college spending, the total comes to $47.5 billion, second only to Christmas.

A survey by the federation found that 85 percent of Americans have made changes to back-to-school spending plans as a result of the economy. Fifty-six percent are hunting for more sales, nearly half plan to spend less and 41.7 percent are purchasing more store-brand and generic products.

"There's no question that consumers are still struggling with spending on discretionary items," National Retail Federation spokeswoman Kathy Grannis said Monday. "Most families are focused on purchasing only essential items. School season plays into both categories."

Parents don't want to send their children to school in ragged jeans, she said. On the other hand, they may find binders, notebooks and paper that didn't get used last year and save money there.

Lennora Martin of Las Vegas said she's on a $250 budget for her middle-school daughter. She bought two pairs of shoes at Meadows mall Monday and was shopping for newly required school uniforms at nearby Fallas Paredes, a discount family clothing store.

"This is the first time I've been here and it looks like great prices, especially the Hannah Montana stuff for younger girls," Martin said. "I'm hoping the quality is all right. I'm just going to buy a couple of things, just to see how it goes."

Third-quarter retail sales, which encompass the back-to-school period, rose just 0.3 percent in 2008 and sales have looked miserable at the chain-store level since July, said Jack Plunkett, chief executive officer of Houston-based Plunkett Research.

That doesn't bode well for this season. Plunkett said he'd be surprised to see retail stores advance at all over last year.

"The 2009 back-to-school season could be in trouble," he said. "Consumers are even more cautious with their dollars this year than last. Shoppers want quality, lasting value and very low prices. Otherwise, they aren't going to buy."

Retailers are trying to respond and reposition by focusing on deep discounts on many types of products, Plunkett said.

That's what it will take to ultimately win over back-to-school shoppers this year, Grannis said. The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers, she said.

Joyce Gibson said she's adjusted her shopping habits.

"I'm doing it less, wherever it's cheapest at," the mother of two school-aged children said while shopping for clothes at a Target store in Las Vegas. She plans to spend $150 on each of them.

Casey Chroust, executive vice president of the Retail Industry Leaders Association, said parents are going to buy whatever school supplies are needed for their children, but they'll probably shop the discount retailers. That's one segment of the industry showing strong performance, he said.

"It's tough out there," Chroust said. "Shoppers are thinking about buyer's remorse before they buy just because things are tight."

Although spending in most back-to-school categories is expected to decrease, one bright spot is electronics and computer equipment, which is expected to increase 11 percent as products become more affordable, the federation reports.

A breakdown of the average family's back-to-school budget shows $204.67 for clothing and accessories, $167.84 for electronics, $93.59 for shoes and $82.62 for school supplies.

Most people (44 percent) start shopping three weeks to a month before school starts, which is on Aug. 24 in Clark County. About one-third shop in the two-week period before school.

Back-to-school spending in Nevada is estimated to reach $158 million this year, down about $13 million, or 7.6 percent, from $171 million in 2008, the Retail Association of Nevada reported.

Twenty-seven percent of Nevada's 1.04 million households are estimated to have one or more children in grades K-12, with the state reporting a total enrollment just over 437,000 students.

"We are hopeful that improving consumer confidence and a number of very attractive sales will provide momentum we can carry into Labor Day," Mary Lau, president of the Retail Association of Nevada, said in a statement.

Retail analyst Plunkett said several negative factors are hurting sales, including high consumer debt levels, higher energy and health costs, rising unemployment and a depressed housing market.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.