NRF: Back-To-School Spending Mixed For Consumer Electronics

By Alan Wolf -- TWICE, 8/4/2008

WASHINGTON — While parents plan to spend more on electronics products for their youngsters during the back-to-school period this year, college-bound kids are cutting back on their CE purchases, a new survey suggests.

According to the National Retail Federation's (NRF) 2008 Back to School Consumer Intentions and Actions Survey, conducted by BIGresearch, parents will spend $151.61 on household electronics like computers and cellphones during the back-to-school timeframe, up from $129.24 last year. Total CE spending is expected to hit $5.1 billion, representing the second-largest expenditure after clothing.

CE fares worse in a separate back-to-school study conducted by Braun Research for Capital One Financial Corp. Of 758 parents queried July 1-8, 25 percent said they are cutting back on electronics, such as PDAs or an iPods, and 53 percent indicated that current economic conditions will impact what items they purchase for their children. Indeed, the number of parents who plan to spend more than $125 on back-to-school shopping dropped to 45 percent this year compared with 52 percent last year, the survey showed.

In contrast, college students will spend more on CE and allocate the largest portion of their budgets to electronics, NRF said, although spending will fall to $211.89 per person, from $258.43 last year, or $11.05 billion in total.

"Though every college student wants the latest-and-greatest gadgets, students are being frugal this year," said Phil Rist, strategy VP at BIGresearch. "While some may opt for a cheaper model, many students may take advantage of computer labs at school or a family computer at home instead of investing in one themselves."

"College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat," added NRF president/CEO Tracy Mullin.

Indeed, back-to-college spending, which has helped buoy retail sales for the past five years, will drop 7 percent overall this year, from an average of $641.56 per person in 2007 to $599.38 in 2008, or $31.3 billion in total.

The average family with school-aged children is expected to spend $594.24 on back-to-school purchases overall compared with $563.49 last year, with spending for kindergarten through 12th grade estimated to reach $20.1 billion.

Combined back-to-school and college spending is projected to hit $51.4 billion, NRF says, representing the second biggest selling period for retailers after Christmas.

According to its poll of 8,361 consumers, conducted during the first week of July, one-fifth (20.5 percent) of parents nationwide have set aside a portion of their stimulus checks for back-to-school purchases, while only 15.5 percent of college students plan to spend their stimulus checks on school-related purchases.

Where will they be shopping? Some 73 percent of parents and 52 percent of college students will buy their back-to-school gear in discount stores, while 21.4 percent of parents and 19.6 percent of college kids plan to shop CE specialty stores.

Forty-one percent of parents in the Capitol One survey said they plan to do their shopping at discount retailers.

About a quarter of all parents and 30 percent of college students in the NRF poll said they will shop online for their back-to-school needs.

"Strong promotions and must-have brands will help retailers stand out in the crowd as shoppers look for the best bang for their buck on back-to-school purchases this year," NRF's Mullin said. "While cost will be the deciding factor, some families will use rebate checks to soften the blow, taking advantage of promotions and deals when they can."

"This year's back-to-school shopper is a bargain hunter at the core," agreed BIGresearch's Rist. "Though parents want to make sure kids are fully prepared for school, they will be comparing prices online and in stores before making any big purchases."

Back-To-School CE Spending
How much do you plan to spend on back-to-school electronics or computer-related equipment?*

	2007	2008
Average of buyers	$228.58	$259.66
Percent buying	58.1%	58.4%
Net average	$129.24	$151.61
Total CE sales	$4.2B	$5.1B
*Asked of parents with school-aged children July 1-8 from a pool of 8,361 respondents Source: National Retail Federation, BIGresearch © TWICE 2008