Back-to-school spending expected to dip big this season
By Jason Buckland, Sympatico / MSN Finance
Where once there were automobiles, insurance companies and stock brokers, now there are protractors, binders and the Big Erase.
Following in the recession-ravaged footsteps of our humbled auto and finance industries, it seems the economy’s slump is looking primed to take a swipe at back-to-school shopping now, too.
A new survey from New York-based Deloitte LLP suggests spending in the U.S. back-to-school season will drop “as more consumers, concerned about job losses, (continue to) set money aside,” according to Bloomberg.
Thirty-two per cent of study respondents said they’re saving more this season – the second largest retail time of the year behind Christmas, by the way – up 10 percentage points from the year before.
And that’s not the only thing that’s on the rise. Twenty-two per cent said they’d spend less because of a recent job loss in the household, up an alarming 12 per cent from a year earlier.
“There’s been a question mark in regards to how permanent is this new behaviour by the consumer,” Stacy Janiak, Deloitte vice chairman, told Bloomberg. “I think a lot of people question whether this recession could have the same effect on the psyche on consumers as the Great Depression.”
While that statement may be your recommended dose of hyperbole for the day, there remain some legitimate concerns over the dry-up of back-to-school spending.
Not only can most not afford to pick up the usual clothes and shoes for the kids, but retailers appear to feel an even greater pinch on the other end of things, as well.
To compete with dollar stores and office supply chains, vendors are “slashing prices” in order to see profit – any profit – in the dog fight for back-to-school bucks, says a local NBC affiliate out of the States.
Sounds like the cyclical gut punch going on between consumers and retailers is a pretty good look into the recession’s lack of prejudice, if nothing else, no?
In any case, as Canada enters its first legitimate back-to-school season of the downturn, it’ll be interesting to see how parents – and kids – cope with it all.