A worker stores shelves of back-to-school supplies at a Target store on August 03, 2020 in Colma, California.
Justin Sullivan | Getty Images News | Getty Images
U.S. shoppers are increasingly worried about visiting stores and trying on clothes in locker rooms, according to a recent survey.
Some of those interviewed by First Insight also say they are starting to cut spending due to the resurgence of Covid cases.
Both trends threaten to slow the momentum for what many predicted to be an incredibly strong back-to-school shopping season.
Deloitte has estimated that back-to-school spending for K-12 children will reach $ 32.5 billion this year, up 16% from 2020 and 17% from 2019. This represents in average about $ 612 per student. The consulting firm’s estimates were based on a survey of 1,200 parents from May 27 to June 5.
Much has changed since then.
While parents may have extra cash after rounds of government stimulus checks and child tax credit payments, the recent surge in Covid cases fueled by the delta variant could upend those predictions. Add to that tight stocks, caused by delivery interruptions and careful planning on the part of retailers and things may not be as rosy as they looked when students started their summer vacation.
Bed Bath & Beyond CEO Mark Tritton told CNBC’s Sara Eisen on Thursday that some customers were delaying back-to-school purchases. He said some of that spending would be postponed to September.
There is no doubt that back-to-school plans could change at the last minute. After all, the Centers for Disease Control and Prevention recently reversed their policy on masking, calling on those vaccinated to wear masks indoors again to prevent the spread of Covid. The new guidelines have prompted consumers to rethink their decisions about dining, travel and other purchases.
Fifty-six percent of consumers say they are proactively cutting spending at retail establishments, First Insight found in a survey of 1,038 people Thursday. This is an increase from 52% a month earlier, when the consumer predictive analytics company asked consumers the same questions about their shopping behaviors related to the pandemic.
The First Insight poll also found that 64% said they were generally worried about the pandemic, up from 51% in July. Fifty-six percent said they felt nervous about interacting with salespeople in stores, a big increase from 43% in July.
“The tailwinds that retailers and restaurants have enjoyed recently may be short-lived,” Sarah Wyeth, analyst at S&P Global Ratings, said in a report to clients.
âEven though the virus can be contained, other risks appear to increase,â she said. “Labor shortages and supply chain bottlenecks could dampen short-term performance or, worse, persist during the critical holiday shopping season.”
Lessons from last year
Thinking about the changes in sentiment over the course of a few weeks this summer provides some insight into the tough calculations retailers are making.
A year ago, retailers put red stickers on âMinions: The Rise of Gruâ products. the The Universal movie’s release has been pushed back to 2022, but the movie-related toys, t-shirts, and even food have made their way to the shelves and then to the trash cans.
It was a similar story for articles related to Disney’s’ Black Widow ‘and Warner Bros.’ “Wonder Woman 1984.” Both films were delayed, but the action figures and backpacks still arrived as planned.
Concerned about accumulating too much inventory for films that might not come out, department stores and big box chains have been more cautious about product selection, especially for entertainment properties. This means there will be less variety for back-to-school shoppers this year.
âRetailers didn’t buy a large assortment, instead planning to have a lot of inventory with less to choose from – a risk mitigation strategy they must have put in place when they bought back to school there. is six to nine months old, âsaid Nikki Baird. , vice president of retail innovation at Aptos, a technology solutions provider that works with shoe brands and other retailers.
Product decisions for this year’s back-to-school year were made over nine months ago. At that time, the vaccines had not been approved.
Even in late spring, buyers feared the products might be out of stock. According to the Deloitte back-to-school survey, 50% of people were concerned about back-to-school items, especially tech products.
âA lot of the items you’re going to buy for back to school are already landedâ in warehouses and stores, said Greg Portell, senior partner in the global consumer practice at Kearney, a strategy and management consulting firm. . “At this point, your fate is fixed.”
Portell is optimistic that consumers will have a long shopping list after skipping clothing purchases last year.
âIt’s not just about buying a few pieces, so you have new clothes to go back to the classroom,â Portell said. “It’s a complete rebuild of your wardrobe. It’s an increase in demand that we’ve never seen before.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Minions: The Rise of Gru”.