NRF projects nearly $147 billion in combined K-12 and college spending
The National Retail Federation projects combined K-12 and back-to-college spending of nearly $147 billion this season, a record, even as the country’s two largest mass retailers describe shoppers searching for cheaper goods. The Wall Street Journal reported that the season is critical and “tells us about the state of the consumer, and in turn the economy.”
At Target, which reported quarterly results Wednesday, CEO Michael Fiddelke described the season as one requiring careful inventory management across markets with differing school start dates. “We know we don’t win in a season where every school peaks at a different time if we don’t have inventory at the right place at the right time, and if we aren’t providing a great guest experience,” Fiddelke said. The Wall Street Journal reported that inventory has been a sore spot for Target, one of several issues the paper has linked to a yearslong slide in the chain’s performance, and that Target is showing signs of recovering.
Target’s chief merchandising officer, Cara Sylvester, said the retailer has “enhanced the shopping experience with AI-powered teacher and college wish lists and more personalized content on our app’s home screen.” That change has driven a 50% increase in the number of customers creating wish lists and more than double the number of items added to them, she said.
On prices, Target has held or cut prices on 95% of its school supply goods and lowered prices on 10,000 products since the start of the year, Fiddelke said. “We think it matters to consumers right now,” he said.
Walmart, which reported Thursday, leaned into pricing as well. U.S. CEO David Guggina attributed the retailer’s performance to its pricing moves. “Customers are responding to just absolutely fantastic investments in price,” Guggina said. He described a list of 14 key school items that Walmart prices below 2019 levels, with the retailer’s Pen+Gear brand offering crayons for 25 cents and No. 2 pencils for 92 cents. “And those prices are resonating with customers and we’re seeing it in traffic, ticket and unit volume all growing,” he said.
For students headed to college, Walmart’s top-selling back-to-college category has been home decor, Guggina said, calling out candles, throws, rugs and lamps as posting “double-digit and triple-digit comps.” Walmart has also introduced a new “back-to-school lunch basket with 10 high-protein lunches for under $2,” he noted.
Walmart CEO John Furner said the chain is “pleased with the way back-to-school and back-to-college have started.” At another point in the call, he called the current consumer environment “softer” than it was in February.
Best Buy reports quarterly results next week. The electronics chain’s report is expected to give a further read on whether parents are buying new laptops, e-readers and other student electronics amid economic uncertainty.