Breakout

Back-to-School ‘Creep’ Hits the Retailers

Jeff Macke
Breakout

With July 4th behind us it's time to start focusing on back to school, at least as far as American retailers are concerned. With traditional Christmas sales now starting the day before Thanksgiving and in some cases showing up right after Halloween, it shouldn't come as a big surprise that companies are attempting to train customers to go straight from barbeques back to the classroom.

Hitha Prabhakar, retail analyst and author, says consumers better get used to what she calls "the back-to-school creep." The middle of summer is a graveyard for retailers. Everyone who needs a swimsuit, grill or baseball bat is already equipped by the end of June. With temperatures soaring the last thing on anyone's mind is buying a sweater.

Those doldrums end with a rush. As Prabhakar notes in the attached video, the National Retail Federation estimates that $84 billion will be spent getting ready for school this year. The season is second only to Christmas when it comes to consumer spending. The fact that the average amount spent on school has grown more than 40% since 2011, makes the idea of starting back-to-school deals as early as June irresistible to merchants.

In a stagnant economy stores are going to strike when the iron, or in this case the pavement, is hot. "Retailers feel that the consumer is not expecting a lot of stability in the coming months therefore they want to get them early," Prabhakar explains.

Just because it makes sense for the retailers to try to get you to buy your notebooks now doesn't mean you should. The deals are going to get better when the days get shorter. "A lot of these retailers start discounting their merchandise as they get closer to the actual back to school day in August." she says.

As is the case with the holidays, all products aren't created equally. Staplers, pencils and notebooks are commodities. Parents don't have to worry about number 2 pencils going out of fashion, but the trendiest clothes might be harder to come by as Labor Day draws near. At least that's what the retailers want you to think.

The apparel companies like Abecrombie & Fitch (ANF) and Aeropostale (ARO) have been struggling lately. For them back-to-school sales are a chance to worm their way back into the hearts, minds and wallets of school-age shoppers and the parents who foot the bill. As a rule of thumb the more desperate the store the better the deals.

The bottom line is that summertime is when the retailers need your business the most. Those who can summon the will to buy a sweater when it's 85 degrees and muggy outside just might find spectacular bargains. The rest of us can relax; no matter what the retailers say there will be plenty of lunchboxes and backpacks available on Labor Day.

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