By Tonya Garcia, MarketWatch
One analyst is forecasting a back-to-school bust this year, as uncertainty around whether COVID-19 will prevent students from going to class suppresses sales during the second largest shopping season of the year.
Colleges and school districts are slowly announcing their plans for the new semester, with some offering classes in person, and others offering e-learning from home or some combination of the two.
Parents, unsure about what exactly the situation will be, are likely to hold off on the usual back-to-school shopping spree, experts and analysts say.
“I am not sure what will ultimately happen, but Los Angeles and San Diego schools are virtual-only for the fall, and I suspect that many blue-state districts (in high population areas) will do the same, so back-to-school should be a dud,” said Michael Pachter, managing director at Wedbush.
On the flip side, the National Retail Federation says back-to-school could be a blockbuster. Parents of children in elementary and high school plan to spend an average of $789.49 per family and college students and their families expect to spend $1,059.20, according to the group’s latest data. Both are record amounts.
Total spending is expected to reach $101.6 billion, breaking the $100 billion mark for the first time.
NRF attributes the record-breaking spending to purchasing computers and laptops. Nearly two-thirds (63%) of families with children in grades K-12 say they will buy a computer and 60% of college shoppers say they’ll buy one.
The NRF annual survey also found that consumers had only completed 17% of their back-to-school shopping by early July. More than half (54%) said it’s because they don’t know what they’ll need.
Wedbush’s Pachter disagrees with the forecast.
“While I agree that more kids are going to need PCs to continue with remote learning, I think it is likely that the uptick in demand from those households who don’t have a PC will be offset by those households with one or more parents laid off or unemployed because of the pandemic, and I think the latter households will try to let the kids use existing equipment rather than buying new equipment,” he said.
Moreover, he notes the spike in computer sales at the beginning of the pandemic as more people began working from home, “so there are a lot of households with brand new equipment.”
Deloitte forecasts that back-to-spending will be flat year-over-year, with parents of children in grades K-12 spending about $529 per student, or a total of $28.1 billion. College shoppers are expected to spend about $1,345 per student, or a total of $25.4 billion for the category.
Electronics spending, which has been trending upward over past years, is expected to grow 28% for K-12 kids.