Worst Performance Ever For Back-To-School Sales

There are two things retailers thought they could always count on, a robust Christmas shopping season and strong back-to-school sales. However, the Christmas fairy tale shattered last year and back-to-school sales are in the midst of their first ever collapse this year.

Inquiring minds are reading Retailers See Back-to-School Sales Slowing.

Halfway through the back-to-school shopping season, retail professionals are predicting the worst performance for stores in more than a decade, yet another sign that consumers are clinging to every dollar.

Stock analysts at Citigroup are predicting a decline in back-to-school sales for the first time since they began tracking the figures in 1995. They estimate August and September sales at stores open for at least a year � known as same-store sales � will fall 3 to 4 percent, compared with an increase of nearly 1 percent in the same period last year.

The National Retail Federation, an industry group, expects the average family with school-age children to spend nearly 8 percent less this year than last. And ShopperTrak, a research company, predicted customer traffic would be down 10 percent from a year ago.

�This is going to be the worst back-to-school season in many, many years,� said Craig F. Johnson, president of Customer Growth Partners, a retailing consultant firm.

This year�s frugality may hark back to an earlier age, but consumers are using up-to-the-minute tools in their determination to save money. They are scouring the Internet for coupons. They are planning their shopping trips around e-mail alerts that tip them to bargains.

One mother, Clarissa Nassar, signed up for alerts about sales on a Web site called Shop It To Me. When she saw that her daughter�s favorite brand, Baby Phat, was on sale at Macy�s, she promptly drove to the department store to shop for school clothes.

�I got an alert for the cutest tie-dye pink top,� said Ms. Nassar, a mother of two, Mikayla, 7, and Joseph, 3, in Johnstown, N.Y. �Originally it was $36 and I got it for $9.75.�

Executives at Google said Internet searches for back-to-school bargains had soared this year. Searches for coupons are up 40 percent over last year and searches for buy-one-get-one-free deals are up 30 percent.

The article notes that Staples lowered prices on 250 back-to-school items in an attempt to compete with Walmart. With that, we can safely add Staples to the ever growing list of Peas In The Deflationary Pod.

In a flashback to the past, coupon sales are soaring. Anyone remember their parents clipping coupons? Except perhaps for huge discounts, how many routinely did it 3 years ago, two years ago?

Some thought last season's Christmas sales were bad. This year is going to be a disaster.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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