As Classrooms Reopen, Stores Expect Strong Sales | New
NEW YORK (AP) – As more children return to the physical classroom and families look to start their lives over, back-to-school spending this year could exceed pre-pandemic levels, according to a measure key to spending.
Mastercard SpendingPulse, which tracks spending on all payment methods including cash, predicts spending to increase 5.5% between July 15 and September 6. This is from the period last year when sales rose 1.2% as the pandemic wreaked havoc on plans to reopen schools and back-to-school shopping.
More telling of a rebound, back-to-school sales are expected to increase 6.7% over two years, according to Mastercard SpendingPulse. Figures exclude auto and gas sales.
Last year, parents concentrated their spending online and bought supplies and electronics to help their kids set up workstations at home. When it comes to clothing, they limited their purchases to sweatpants and other comfortable clothing for their children and avoided department stores.
The optimistic forecast released on Thursday comes as retailers, especially mall stores, see a strong recovery as newly vaccinated shoppers feel safe to go out and socialize. On Wednesday, the National Retail Federation, the country’s largest retail group, sharply revised its annual outlook for retail sales. He now expects the increase to be between 10.5% and 13.5% from an earlier forecast of at least 6.5% made in February.
âThe economy and consumer spending have proven to be much more resilient than initially expected,â said Matthew Shay, president and CEO of the retail group, in a statement. “The combination of vaccine delivery, fiscal stimulus, and private sector ingenuity has put millions of Americans back to work.”
While the NRF noted the risks associated with labor shortages, an overheating economy, tax increases and over-regulation, it pointed out that households on the whole are better off. health and that consumers demonstrate their ability and willingness to spend.
The downside is that many retailers may not be able to take full advantage of this sudden spike in spending.
For many items produced overseas, stores had to place their orders at least six months ago, and they were conservative, says Steve Sadove, senior advisor to Mastercard and former CEO and chairman of Saks Inc. He also cited the deadlock at ports, making it difficult for retailers to bring goods into their stores.
âThe supply chain is safeguarded. The ports are backed up, âhe said. âYou will find the shortage. He said a number of retailers he spoke to have to ship items by air instead of ship them in order to have them in stores in time for the start of the school year.
Going back to school, Sadove said clothing is expected to experience a stronger-than-expected rebound, with Mastercard SpendingPulse forecasting a 78.2% increase in sales from last year. Over two years, the figure is expected to be up 11.3%. Sadove said retailers are seeing a shift in consumer spending towards more on-trend items like crop tops and mini skirts.
In particular, department stores are enjoying a strong recovery after struggling last year with stiff competition from discount stores like Walmart and Target.
Departmental sales are expected to be up 25.3% in September compared to a year ago. Sales are expected to increase 9.5% over two years.
Sadove told the AP that department stores are reaping the rewards of their efforts to expand into online services, such as allowing online shoppers to pick up their orders from stores. They are also expanding into new categories like wellness.
Consumer Electronics is expected to experience strong sales growth compared to a year ago and on a two year basis. But online sales are expected to fall 6.6% for this period compared to a year ago, when shoppers were primarily focused on buying online. Still, that figure is expected to rise 53.2% over two years, according to Mastercard SpendingPulse.