Back-to-school spending to drop 7.7%

Families say they'll spend less than they did last year to get kids ready for the fall, relying heavily on sales and coupons.

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By Julianne Pepitone, contributing writer

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NEW YORK ( -- Back-to-school spending is set to slip 7.7% this year, according to a survey released Tuesday.

Thanks to pay cuts and job losses, cash-strapped consumers are planning to spend less on everything from pens and paper to fall clothing.

The average family with students in grades kindergarten through high school is expected to spend $548.72 on school supplies, down from $594.24 in 2008, according to the National Retail Federation.

"There's not a lot to be excited about," said George Whalin, president of Retail Management Consultants. "It's going to be very challenging for retail, for a long time."

Four out of five respondents said they have changed their back-to-school shopping strategy as a result of the ailing economy, and plan to search out more promotions and deep discounts this shopping season. According to the report, 56.2% said they are looking for sales more often, while 49.6% planned to spend less overall. About two in five said they would purchase more store-brand products and use more coupons.

In their search for bargains, consumers are getting more creative about where they intend to shop. More than 21% said they will make their school purchases at drug stores, and over 18% will go to thrift stores for back-to-school clothing.

Despite the bleak data overall, it appears that discounts will boost the electronics sector. Spending on items like computers, is expected to increase 11% to $167.84 per family.

'Don't wait too long' for sales

Almost half of respondents -- 44% -- said they will start shopping about a month before school starts, in an attempt to find early discounts and to spread their spending out over time.

Nearly one-third (31.8%) will shop 1-2 weeks before school begins, and 2.5% will wait until after the start of the year, hoping to find clearance sales and postpone spending.

But consumers should take care not to wait too long, Whalin warned, since the long-suffering retail sector has sharply cut back on inventory.

"Retail has been dealt a big blow, but they've gotten good at this," Whalin said. "They're prepared for down months, so we don't see the piles of supply that we saw a few years ago. Consumers need to get in and buy before it's gone."

Whalin noted that although some experts speculate that the current economic downturn has triggered a permanent change in consumer spending behavior, he disagrees.

"At some point, when the job situation improves, people will spend again," he said. "But the numbers don't look good, and consumer morale is low."

He added, "I spend a lot of time in stores, monitoring behavior, and foot traffic is dismal. There's just no one out there." To top of page

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