Parents prepare to pay more for back-to-school due to inflation: KPMG

A worker stores shelves of school supplies in a Target store on August 28, 2020 in Colma, California.

Justin Sullivan | Getty Images News | Getty Images

Parents prepare to pay for this back-to-school season as prices of items from clothing to notebooks rise, according to new survey data.

Average parent spending per student is projected to be up to $ 270, compared to about $ 250 in 2020, KPMG found in a survey of 1,000+ adult consumers in the US in May.

Parents of preschoolers plan to spend up to 32% more this year, according to the survey, while parents of college-age students will spend about 13% more. The sharp increase in these two groups is partly due to more people entering both preschool and college this fall, after those plans were put on hold a year ago.

However, a major reason for the increased spending is growing expectation that items will cost more in the coming months, KMPG economists said. A combination of supply shocks from US manufacturers and abrupt consumer demand for goods, including school supplies, has created the perfect storm for this scenario, KPMG said.

Of those surveyed who said they would spend more money on their children this year, 39% believe sticker prices will rise and inflation will rise.

Consumer prices accelerated as fast as they had in nearly 13 years in May, a sign of how much inflationary pressures are growing in the US economy. Clothing prices rose 1.2% from April. Shoe prices rose by 1.4%. The cost of textbooks and supplies rose 0.7% month on month, according to the latest data from the Department of Labor.

Demand is also higher than it was a year ago, meaning retailers are offering far fewer discounts, said Scott Rankin, strategy director for KPMG’s US consumer and retail division

“There are fewer promotions and coupon offers, so pricing has increased quite a bit in many retail categories,” said Rankin. “We haven’t seen the full press from the office supply stores and some of the mass marketers and the big e-commerce players … but I think we will be doing less advertising” [school] delivers. “

As more and more students return to the classroom, a greater proportion of that back-to-school spending is devoted to things necessary for personal learning. Categories like shoes, clothing, and essential school supplies like notebooks will account for the largest share of parents’ budgets compared to 2020, KPMG said.

Consumers expect to spend less on electronics and office furniture – two categories that benefited largely from the stay-at-home trends over the past year.

For many parents, going to a store like Office Depot or Target with their children is an unforgettable tradition.

And as Covid restrictions continue to be lifted, more people – 57% of respondents – expect to search the aisles in person, compared with 44% planning to shop online, the survey found. E-commerce spending increased significantly compared to 2019, when only 34% of respondents said they bought items such as loose-leaf paper and backpacks online.

When asked when they would start back to school and college this year, 33% of US consumers said it was in July, followed by 30% in August, KPMG found. Ten percent of those surveyed said they had already started shopping for the coming school year.

For many families, the theme this back-to-school season will be “spend money and look good,” said Rankin. “Go out and get your Air Jordan 1s … if you can find it.”

source https://collegeeducationnewsllc.com/parents-prepare-to-pay-more-for-back-to-school-due-to-inflation-kpmg/