The inflation rate topped 9.1% in June, the highest percentage in 40 years, according to the U.S. Bureau of Labor Statistics. The Consumer Price Index was up 1.3% in June on top of the 1.0% increase in May. The energy index was up 7.5%, contributing to nearly half of the all items increase, and the gasoline index jumped 11.2%.
The food index increased 10.4 percent in the last 12 months, the largest 12-month increase since February 1981.
According to the annual back-to-school survey conducted by the National Retail Federation (NRF) and Prosper Insights & Analytics, 38% of consumers indicated they would cut back on spending in other areas to cover the costs of back-to-school shopping. Families expect to spend more on back-to-school items because of inflation and higher prices.
“Families consider back-to-school and college items as an essential category, and they are taking whatever steps they can, including cutting back on discretionary spending, shopping sales and buying store- or off-brand items, in order to purchase what they need for the upcoming school year,” NRF President and CEO Matthew Shay says. “The back-to-school season is among the most significant shopping events for consumers and retailers alike, second only to the winter holiday season.”
Back-to-school spending is expected to reach $37 billion, matching the record high from last year, with shoppers spending $168 more on average. Back-to-college spending is estimated at $74 billion, an increase from last year’s record of $71 billion.
To combat the higher prices, consumers said they would shop early to find deals, and 56% had already started school shopping in early July. About three out of five shoppers planned to purchase school items during Prime Day deals on Amazon, 31% will shop for deals online and 20% will look for in-store deals.
“We are seeing real shifts in the way people are shopping and spending on back-to-class items since before the pandemic,” says Prosper Insights executive vice president of strategy Phil Rist. “As a result, retailers are also shifting by bringing in inventory earlier and extending back-to-class offerings.”