Parents prepare to pay more back to school due to inflation: KPMG
A worker stores shelves of back-to-school supplies at a Target store on August 03, 2020 in Colma, California.
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Parents are preparing to pay this back to school, as the prices of clothes in notebooks are on the rise, according to new survey data.
Average parent spending per student is expected to reach $ 270, up from about $ 250 in 2020, KPMG found when polling more than 1,000 adult consumers in the United States in May.
Parents of preschoolers plan to spend up to 32% more this year, according to the survey, while parents of college-aged children will spend about 13% more. The big increases in these two groups are in part due to more people entering both preschool and college this fall, after putting those plans on hold a year ago.
But one of the main reasons for the increase in spending is the growing expectation that items will cost more in the coming months, KMPG economists said. A combination of supply shocks for U.S. manufacturing suppliers and sharply increased consumer demand for goods, including school supplies, has created the perfect storm for this scenario to unfold, KPMG said.
Among survey respondents who said they plan to spend more money on their kids this year, 39% believe sticker prices are rising, with inflation on the rise.
Consumer prices in May accelerated at the fastest rate in nearly 13 years, a sign of mounting inflationary pressures in the US economy. Clothing prices rose 1.2% from April. Shoe prices jumped 1.4%. The cost of books and educational supplies rose 0.7% month over month, according to the latest data from the Ministry of Labor.
Demand is also higher than a year ago, which means retailers are giving significantly fewer discounts, said Scott Rankin, head of strategy for KPMG’s U.S. consumer and retail division.
âThere are fewer promotions and coupon offers, so price achievement has increased quite significantly in many retail categories,â Rankin said. âWe haven’t quite seen the full press of office supply stores and some of the mass merchants and big e-commerce players yetâ¦ but I think we’re going to see less promotion around. [school] Provisions. “
As more students return to class, a greater proportion of this back-to-school spending will be spent on items necessary for in-person learning. Categories such as shoes, clothing, and basic school supplies such as notebooks will see the largest increases in a parent’s share of a budget from 2020, KPMG said.
Consumers expect to spend less on electronics and office furniture, two categories that have benefited from stay-at-home trends for much of the past year.
For many parents, going to a store like Office Depot or Target with their children is a back-to-school tradition.
And with Covid’s increasingly lifted restrictions, more and more people – 57% of those surveyed – expect to walk the aisles in person, compared to 44% planning to shop online, according to the survey. . E-commerce spending increased significantly from 2019 levels, when just 34% of respondents said they would buy items like loose-leaf paper and backpacks on the web.
When asked when they would start back-to-school and back-to-school shopping this year, 33% of U.S. consumers responded in July, followed by 30% in August, KPMG found. Ten percent of those surveyed said they have already started shopping for the next school year.
For many families, the theme for this back-to-school year will be âspend the money and look great,â Rankin said. “Go out and grab your Air Jordan 1s … If you can find them.”