Date: Tuesday, August 10th, 2021
Source: The Wall Street Journal
Concerns over the Delta variant and supply-chain issues that have made it hard to find items like backpacks are upending back-to-school shopping plans for families, prompting some to curtail spending.
The uncertainty comes just as retailers are gearing up for what has been expected to be record back-to-school shopping. The National Retail Federation predicts that consumers with children in kindergarten through 12th grade will spend $37.1 billion this year, the most since the industry group began conducting its survey in 2003. Back-to-college spending is expected to total $71 billion, also a record.
Chains from Target Corp. TGT +1.06% to Staples Inc. are still betting that parents will snap up clothing, backpacks, lunchboxes, notebooks and other items that they didn’t purchase last year, when many students attended school remotely during the height of the Covid-19 pandemic.
“People are questioning whether students will actually go back to school and parents are crossing their fingers hoping it really will happen,” said Jim Weinberg, the chief merchandising officer at DSW Designer Shoe Warehouse, which is owned by Designer Brands Inc. DBI +7.54% “But we still expect to have a very robust back-to-school season. Because people didn’t make as many purchases last year, they are approaching this year with gusto.”
Not just retailers are facing mounting uncertainty from the summer rise in U.S. coronavirus cases. Companies are delaying plans to bring workers back to the office, organizers canceled the New York International Auto Show, and New York City will impose vaccine requirements for indoor dining. Last week, Frontier Airlines ULCC +3.03% said its bookings had started to slow more than they typically would at this time of year, a change it attributed to the Delta variant.
Those shifts have raised questions in the minds of some parents as to whether children will be back in the classroom this year.
“A few weeks ago, I thought school would be back full steam,” said Dino Selita, a father of three children, who lives on Staten Island, N.Y. “Now, there is more uncertainty.”
Mr. Selita said he still plans to buy clothes and shoes, because his children have outgrown what is in their closets. But some items aren’t easy to find, given the supply-chain problems that retailers are facing due to the temporary factory closures in Asia, shipping delays and port congestion.
On a recent trip to Target, Mr. Selita hoped to buy backpacks and white sneakers with Velcro closures for his girls, ages 4 and 6, but left empty-handed because the store didn’t have the right styles and sizes in stock.
Catherine Alford, of Berkley, Mich., had trouble finding backpacks for her 7-year-old boy-girl twins at L.L.Bean Inc. The pink style favored by her daughter was sold out, she said.
“I usually enjoy back-to-school shopping, but things still don’t feel quite right this year,” Ms. Alford said.
A Target spokesman said the retailer has been working closely with its partners to ensure it has enough merchandise for the back-to-school season. An L.L.Bean spokeswoman said that while a particular color or style may be out of stock from time to time, it is in a “good position at the moment with all back-to-school inventory,” because it brought goods in earlier this year in anticipation of supply-chain disruptions. She said sales of back-to-school items are up 200% compared with the same period a year ago.
A Staples spokeswoman said that while there is still a lot of uncertainty around returning to the classroom, school start dates are tracking toward its initial expectations. Nevertheless, the retailer is giving priority to deals on supplies for remote learning, she said.
Mr. Weinberg of DSW said the chain moved up its back-to-school orders by about 20 days, placing them with factories in mid-December instead of early January as it had in past years. But he added that the recent shutdowns of some Asian factories due to Covid-19 outbreaks are creating fresh concerns for the coming holiday season.
Mr. Weinberg said that parents are playing catch-up this year, after holding off on purchases last year. On a recent trip to a DSW store in Columbus, Ohio, he noticed parents buying multiple pairs of shoes for their children.
That has been the case for Elizabeth Rietz and her daughters, ages 13 and 15, who have been buying jeans, tops and shorts. “We’re making up for last year, when we didn’t buy much,” said Ms. Rietz, who lives in Los Angeles.
Other factors could also buoy back-to-school spending. Analysts say the increase in the child tax credit, which first hit Americans’ bank accounts in July, will be a boon to retailers. And given that some schools start in early August, a number of parents had already begun their back-to-school shopping before worries over the Delta variant escalated in late July.
Some parents said they are dialing back their spending, particularly since they have unused supplies from last year.
“We bought stuff last year and now are stuck with a bunch of items that didn’t get used,” said Xavier Epps, a father of five children, ages 6 through 17. “Two of my kids have scientific calculators that they haven’t even opened.” Other unused items include composition books, binders, folders, pencils and pens, he said.
Mr. Epps, who lives in Washington, D.C., said he plans to spend 40% less this year on back-to-school items compared with previous years. Although his childrens’ schools are still operating on the assumption that learning will take place in person this year, he isn’t so sure.
“With the new variant going around,” he said, “I’m not confident they’ll be going back.”