Back-to-School Sales: What Do They Say of the Holiday Season?
by Christina Lee on November 11th, 2008
In attempts to prepare for the upcoming and largely unpredictable holiday season, retail stores and experts debate whether they can rely again on back-to-school sales figures for answers.
Including back-to-college sales, back-to-school spending makes up the second largest retail season of the year. Nielsen predicted, then confirmed through findings that this past season was “shorter but more intense.” Consumers had waited for more aggressive sales and promotions to appear as the first day of school drew near.
In anticipation of a slower season, retailers cut back-to-school inventories in anticipation of a slower season, according to The New York Times . But consumers also cut their spending, resulting in double-digit sales declines and more fall merchandise left on their shelves.
Sales of digital cameras, MP3 players, desktops and printers all went down during the back-to-school season, according to CNET News . But expected declines in notebook sales and the introduction of new product categories make the holiday season difficult to compare to the months before.
In efforts to cope, retailers have been offering more bargains to move inventory throughout the next two months – resulting in a more drawn-out holiday season than they usually have to bear.
“While low inventory levels may enable retailers to avoid ‘fire sales,’ consumers are looking for deals and value,” said Stacy Janiak, Deloitte ’s U.S. retail expert.
Considering such expectations, discounters fared well during the back-to-school season, and are predicted to be consumers’ primary destination for holiday shopping. After Deloitte found that more consumers will shop at dollar stores for their back-to-school needs, the National Retail Federation found that about 70 percent of consumers planned to shop at discount stores this holiday season.
After offering school supplies for as little as 5 cents each – then seeing growth in September and October – Wal-Mart will continue week-to week savings and Rollback sales throughout the holiday season. It hopes to save consumers an additional $200 million the holiday season, as it predicts low single-digit comparable sales growth going into 2009.
In the meantime, retailers are still advised to promote their deals and values.
“Retailers will likely not be penalized for their lean staffing levels since consumers are focused on value rather than on other factors,” Janiak said. “As we saw in the back-to-school season, price-oriented retailers have an edge in this environment.”