August 22, 2013

School shopping offers a lesson on the economy

Back-to-school buying has started slowly, and may provide clues about the coming months.

By Jessica Hall jhall@pressherald.com
Staff Writer

This year's back-to-school shopping season has gotten off to a slow start and retail experts have mixed views about how the season, which is crucial for retailers, will progress.

20130813_B2_School
click image to enlarge

Leanne MacKay helps her daughters, Maggie, 13, and Emily, 11, choose backpacks at the L.L. Bean store in Freeport on Tuesday. The family, from Halifax, Nova Scotia, said they are combining their vacation time with back-to-school shopping for clothes and supplies.

Gordon Chibroski/Staff Photographer

20130813_B2_School
click image to enlarge

Martha Dean of Warwich, R.I., carries an armful of back-to-school items for her son, Josh, 7, at L.L. Bean in Freeport. Dean, who is vacationing in Maine, took advantage of her time here to visit Freeport’s downtown retail center.

Gordon Chibroski/Staff Photographer

"A lot of it has to do with the weather. People are still in the summer mindset -- people aren't giving up on summer," said Curtis Picard, executive director of the Retail Association of Maine. "But it's only three weeks away -- it kind of sneaks up on you."

But shoppers will be looking for bargains.

"Maine shoppers are going to be spending smartly. They'll be focused, looking at promotions and discounts. Consumers have become more intelligent buyers over the years," said James McConnon, professor of economics at the University of Maine. "People may delay purchases by a few weeks to get better deals -- people may take advantage of after-Labor Day sales."

Picard said consumers will inevitably be buying some perennial staples such as clothes and shoes, but predicted that parents will recycle some school items in order to stretch their money. Parents may try to get another year of use out of items like backpacks and lunch boxes, he said.

The back-to-school shopping season, which runs from mid-July through Labor Day, can give retailers an indication of what to expect going into the holidays.

"It's a very important time for Maine and the national economy," McConnon said. "It's second only to the holiday shopping season and it's often seen as a barometer of things to come for the holiday period."

Analysts are mixed on how healthy U.S. retail sales will be during the back-to-school season this year compared to last year.

The National Retail Federation is predicting back-to-school sales for kindergarten through 12th grade will fall 8 percent from last year to $26.7 billion. On average, parents are expected to spend $634 per family on back-to-school items, down from $688 last year.

Not everyone agrees that spending will fall this year.

ShopperTrak, which counts and analyzes retail foot traffic, predicts national retail sales will rise 4.3 percent in August.

NPD Group, a retail research firm, said it expects consumers to start their shopping later in the season but spend more this year, especially online. Overall, the group expects back-to-school sales to rise 5 percent by Sept. 1.

The NPD Group expects apparel and footwear, followed by calculators, accessories, school bags and sports equipment to rise, while sales of school supplies will drop.

Leanne Mackay of Halifax, Nova Scotia, was shopping on Tuesday in Freeport with her daughters Maggie, 13, and Emily, 11, checking out clothes at stores like Abercrombie & Fitch and backpacks at L.L. Bean.

Her daughters both need new backpacks, which will push the family's back-to-school spending up from last year, Mackay said. She did not put a dollar figure on her budget.

Martha Dean of Warwick, R.I., who was shopping with her son Josh and husband Ed at L.L. Bean, said she expects to spend more money this year but also did not put a dollar figure on her budget.

"We're spending a little more this year. We're buying a good backpack so it lasts," she said.

Local retailers said they're optimistic about the back-to-school season.

"We know anecdotally that back to school sales have been challenging for many retailers, but our sales so far have been above budget and well above last year. And our kids' division has been performing particularly well in recent weeks," said L.L. Bean spokesman Mac McKeever.

He declined to give sales figures.

In recent weeks, key retailers, including some that cater to teens, have issued warnings about weak second-quarter results. While August is the crucial back-to-school shopping time, weak sales in July don't bode well, analysts said.

Macy's Inc. on Wednesday blamed a disappointing second quarter on consumer reluctance to spend on non-essential items. That has led the store to institute deeper markdowns. The chain's second quarter sales fell 0.8 percent, well below analysts' prediction of a 2.3 percent gain in the quarter.

Aeropostale also warned investors that its second-quarter loss will be 42 cents to 44 cents per share, more than double that of an earlier forecast. Rival retailer American Eagle Outfitters also slashed the outlook for second-quarter earnings.

In light of a disappointing retail outlook nationally, some stores are offering deeper discounts in August. Freeport retailers will benefit from a promotion by Amtrak's Downeaster, which is offering a three-day promotion from Aug. 20-22 in which passengers can leave from any Downeaster location and travel to Freeport for $10 one-way. Up to two children younger than 15 can ride for $5 one-way when accompanied by a $10 adult fare.

The back-to-school promotion is similar to a holiday shopping special the Downeaster ran last year on Black Friday, the day after Thanksgiving and the traditional launch of the holiday shopping season.

"Freeport is the perfect place for back to school shopping," said Janet Dutson, executive director of FreeportUSA, the local merchants association.

Chris Cummings, manager of Mexicali Blues in Freeport, said the Downeaster promotion will help bring in more foot traffic and boost sales during the key back-to-school season.

"It seems like a smart promotion. It will help sales for everyone here and allow people from Boston to enjoy the mix of Freeport stores," Cummings said.

Staff Writer Jessica Hall can be contacted at 791-6316 or at:

jhall@pressherald.com

 

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)