**Back-to-School Spending Expected to Decline in 2023 Amid Inflation**
The upcoming back-to-school season is expected to see a decline in spending for the first time in nine years, according to a new survey by Deloitte. This decrease in spending is projected to be around 10%, resulting in a retail shortfall of over $3 billion compared to the previous year. Inflation and financial struggles faced by families are believed to be the main factors contributing to this decline.
**Decrease in Back-to-School Spending**
Deloitte’s survey reveals that back-to-school spending for 2023 is estimated to be $31.2 billion, with an average spend per child of $597. This is a decrease from $661 per child in 2022 and $612 in 2021. While there is expected to be a 20% year-over-year growth in spending on school supplies, spending in categories such as clothing, accessories, and tech products is expected to drop by 14%, 13%, and 13% respectively.
**Impact of Inflation and Financial Struggles**
The decline in spending can be attributed to the impact of inflation and financial struggles faced by families. Over the past two years, the cost of school supplies has increased by 23.7%. In addition, 30% of the parents surveyed mentioned that they are in a worse financial situation compared to the previous year. More than half of the parents also expressed concerns about the weakening economy by the end of the year.
**Strategic Spending and Priorities**
Given the strained budgets, many parents are expected to be strategic when it comes to their spending for the back-to-school season. While they aim to ensure their children are well-prepared for the start of the school year through renewing school supplies, they may delay purchases of new clothing until necessary. This approach is driven by the need to prioritize essential items while being mindful of the overall financial situation.
**Survey Results and Insights**
Deloitte conducted the survey among 1,212 parents with at least one child attending school in grades K-12. The company has been tracking back-to-school spending trends since 2011, providing valuable insights into consumer behavior during this period. This year’s survey highlights the impact of inflation and financial struggles on back-to-school spending patterns.
**Upside for Retailers and Early Deal Hunting**
Despite the overall decline in spending, there is still positive news for retailers. Planned back-to-school spending for 2023 is still higher compared to pre-pandemic levels, showing a 12.2% increase compared to 2019. Furthermore, parents are expected to start looking for deals early, with 59% of spending expected to occur by the end of July. This presents an opportunity for retailers to attract customers with attractive offers and promotions.
Overall, the upcoming back-to-school season is anticipated to see a decrease in spending due to inflation and financial struggles. However, retailers can still capitalize on the higher spending levels compared to pre-pandemic times and appeal to customers by offering deals and discounts. By understanding consumer preferences and adapting their strategies accordingly, retailers can navigate the challenges posed by the current economic climate.