Back-to-school spending takes a dive

The economy continues to worry the world's grownups, and that will take a toll on student expectations this year.

By Jonathan Berr Aug 1, 2013 7:21AM
Image: Student in classroom (© Digital Vision/Getty Images)Attention students hoping for back-to-school bling: Mom and dad aren't exactly flush with cash.

The National Retail Federation estimates that parents and other guardians will spend 7.8% less in 2013's school-shopping season than last year.

The reason is simple: Many adults are worried that the economy is recovering too slowly from its worst downturn since the Great Depression. Indeed, it grew just 1.7% in the second quarter, an increase from 1.1% in the first quarter

If you think that not particularly fast, you're right. It's painfully slow, kind of like watching paint dry. 

To make matters worse, gas prices are on the rise. The national average for a gallon of gas is $3.63, a 13-cent increase from a year ago, according to AAA. The unemployment rate remains stubbornly high at 7.6%.

Stores are going to find it difficult to attract shoppers' attention given these circumstances.

"Retailers will not only have to make offers very attractive this season, but they will have to score an 'A+' on unique, exclusive merchandise and services that nobody else can offer," Alison Paul, a retail sector leader at the Deloitte consulting firm, said in a statement quoted by Bloomberg News.

Of course, that's easier said than done. 

Many kids, not surprisingly, have different views about what they need for school than their parents. About 21% of teens identified mobile phones, electronic gadgets and computers as must-haves, according to a Capital One survey Bloomberg quoted. Only 4% of parents felt the same way.

As kids get ready to drag their parents -- or to be dragged by them, if they're like most boys -- to go shopping, expectations need to be set realistically.

Instead of buying daughters a pair of super-skinny jeans from Gap (GPS) that are on sale for $26.21, parents might push for similar jeans at Wal-Mart (WMT) that go for $12.94. Those $149 Steve Madden pumps from Macy's (M) may have to give way for a $20 pair from Payless shoes. Perhaps students might also need to hold on to their old but serviceable smartphones for another year.

Kids, if having your expectations crushed seems harsh now, just wait until you get to be an adult. It will be much worse.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr
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170Comments
Aug 1, 2013 8:33AM
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Students might need to hold onto their old smartphones for another year?  If you have a family of 4, where 2 kids have smart phones, and both their parents have smart phones, and they all share a data/calling plan, how much are these parents spending per month so everyone in their family can talk, text and check their facebook page?  And how many of these families are also getting food stamps?

As a society, our priorities are jacked up.

Aug 1, 2013 9:30AM
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All we need are clothes this year.  I bought so many school supplies 4 years ago on clearance, that I have enough for the next 10 years. 

 

No, smart phone either, she'll have a regular cell phone, no texting, for emergencies only.  School is not a place to play games, and text all day long.  Heaven forbid we might send our kids out without more distractions.

 

 

Aug 1, 2013 9:06AM
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DUH!  Let's see. No jobs, no prospects, cost of living has grown sky high, can't afford fuel, and your afraid they might have to have their phone for one more year? Really? WTH?  where is the priority here?


Aug 1, 2013 9:23AM
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The new clothes and student supplies are just part of the story. Around here, the kids will come home with a list from the school "requesting" office supplies for the school as well. If a parent decides to pass-up the opportunity to stock the classroom, a "bill" will appear next!!

 

I understand they need an education, but could I at least get an employable kid back??? This is just a warm-up for what happens in college a few years from now!

Aug 1, 2013 9:27AM
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Some of this may be due to the fact that people are wising up and realizing that their local stores are raising prices and then putting things on sale so that it looks like they are getting a deal when they really aren't
Aug 1, 2013 9:01AM
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gosh, if those gas prices were under bush/chaney there would be a lot of chatter about republicans in bed with big oil.  funny, the media says nothing about obama/biden being in bed with big oil.  just sayin'

 

hey, america how is the hope and change workin' for ya?????

Aug 1, 2013 9:46AM
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I switched to Boost Mobile... deal with it... I dropped "big 3" years ago.. straight pre-paid!  and .. now they are getting into the game.. too late!.. my phone bill has been $35 a month... unlimited talk, text  and web for the past two years.. dropped the kids phones too... why the heck do they need smart phones? I have one job... so we have one smart phone! (Samsung Galaxy S III) When they get jobs... they can get phones!! period! and I'm not spending jack at WAl-Mart! I'm going to find a local small business owner or a local shop to buy jeans and shirts.. even if it's goodwill... and keep my money right in my own community! I am sick and tired of being sick and tired... maybe my few pennies don't mean much.. but Im not going to be part of the economic problem any more!.. and yes!!! I drive a Chrysler...... 
Aug 1, 2013 9:32AM
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Many kids are in for a shock when they get into the real world.  With all the helicopter parents and everybody wins attitude, kids are gonna get reamed when they gorw up. 
Aug 1, 2013 9:55AM
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My kids will have to do exactly what I had to do if they want something out of the ordinary. Ill budget them with whatever I feel they need clothes, sneakers, etc. But if you want an upgrade from the $30 sneakers im buying you get a job and pay the rest. $110 sneakers? no problem. Heres $30 the rest is on you.

Cell phone? Not a chance - heres one that has 4 buttons - mine, the wifes, fire dept., and police dept.. Have fun. Want a smart phone? Save up, buy it yourself and the contract. You are not going on the family plan nor am I co-signing.

Car? Nope. Heres a bus pass. You want a car buy it along with the insurance.

Aug 1, 2013 9:43AM
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School is starting and the all out assault begins.  Education takes a back seat to propaganda...  importance on emphasizing back-to-school "BLING".   And people wonder why scores are so low and we have of country full of uneducated and drop outs.
Aug 1, 2013 9:33AM
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My kids get all the stuff like pens, paper, (cheap) backpacks, and stuff like that.  I don't spend a lot of money... oh, and shoes - if theirs are still good, they don't get shoes.  Cloths?  If theirs are still good, they don't get cloths.  Smart Phones, well, my kids are 3 and 8 so I don't have to worry about that.  But even if they were older, I still wouldn't get them a new phone.  Heck, my kids will be lucky to have a phone until they are at least 12, and even then I am not alright with the idea of them having a phone until they can afford to pay for it themselves.  I had cousins that got all the expensive stuff, I was brought up on the $10 jeans, $20 shoes, backpacks that lasted 4 years, pens and paper that was left over from the year before and then replaced as needed.
Aug 1, 2013 9:41AM
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Parents who provide smartphones to their teenagers shouldn't cry broke when their cell service bill exceeds necessities, such as food, insurance, transportation, etc. Why does a kid need a cell phone in school anyway? Teens get designer clothes, new electronic toys, new cars, while their ignorant parents file chapter 7. No wonder this country is **** backwards.

 

 

Aug 1, 2013 9:31AM
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We all had a 2 1/2% pay cut with the additional taxes. I've not had a raise in 6 years, but the cost of living has skyrocketed in those 6 years. Midwest resident, that change has just done wonders for our country. Heck another few years and we might be in the sewer lines instead of the toilets. Designer clothes, shoes, and ridiculously high priced smartphones, ipads, laptops, and whatever else is "in", for most families just isn't possible. I don't know why a 7 year old needs a smartphone, but they all seem to have one. Perhaps our 1% will help us out.
Aug 1, 2013 9:54AM
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Time to start being a parent and stop being their best friend.  Tell them that if you're buying their clothes, you get to decide where to shop.  At the same time, teach them how to get the most for their money.  They'll get over having to have something from Hip and Trendy that's marked up 200% when they realize that they could have bought 4 more outfits for the same money, and had some left over for shoes.
Aug 1, 2013 9:45AM
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My 10 yr old son just doesnt need that much this year, all his jeans and pants still fit for now.  He does need shoes and a new coat, and I did pick up a few shirts at Marshalls.  I always find good deals on brand names there.  I bought him a couple of adidas shirts for $5 a piece and a couple of button downs for less than $10.  My biggest deal was a North Face hoodie that goes for $75 and I found it at Marshalls for $18.  I refuse to shop at Walmart if I can get brand name for the same price.
Aug 1, 2013 9:43AM
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How is a child supposed to show up as school with ANYTHING from last year. What about their self esteem. Schools may be forced to drop a math course in order to repair a students self esteem. The Administration should send out clothing and backpack vouchers redeemable at Abercrombie, etc.

 

Seriously, parents lavished stuff on their kids in exchange for time.  Now that they don't have jobs the time is there but not the money.  Once parents spoil their kids rotten there are only a few rules to remember.  Don't feed them after midnight and don get them wet.

Aug 1, 2013 9:38AM
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Hope nobody is wondering why, Its Obama's economy now, and it is worse than when he took office more than 4 yrs ago, that makes it ALL HIS and surprise for many, its just the way he wants it.

Aug 1, 2013 9:58AM
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The Obama permanent campaign is still deceiving the public.

 

"...it (the economy) grew just 1.7% in the second quarter, an increase from 1.1% in ."

 

Actually, that first quarter growth was originally claimed to be about the same as this second quarter claim - until it was revised downward. The same thing as happened the quarter before that.

 

It's the Obama modus operandi. Roll out improvements to an economic metric with great fanfare and then quietly revise it downward a few weeks later.

Aug 1, 2013 9:41AM
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perhaps it's because IT'S ONLY JULY FOR PETE'S SAKE!!!!!
Aug 1, 2013 9:32AM
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