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PARENTS FAILING TO SPEND FOR BACK-TO-SCHOOL; STUDENTS HAVE LESS INFLUENCE ON BUYING
Charleston, SC, July 21, 2009.... American parents worrying about their financial futures are putting the brakes on spending for back-to-school according to a new survey released today by America's Research Group (ARG) and UBS. The annual Back-To-School Survey found that 34.4% of parents plan to spend less this year compared to last because they have "less money" (41.8%), "higher debt" (40.5%) and fear losing their jobs (8.2%).
"Back-to-school spending will be a minor blip on the radar screen for retailers this year," says consumer trend expert C. Britt Beemer, CEO and Founder of ARG. His gloomy prediction for retailers is that back-to-school spending will drop 8.5% to 12% compared to a year ago when back-to-school sales declined over 5%.
Over half of American parents (50.9%) are trying to get their children to wear what they wore last year. They are flexing parental muscle in the matter with children's influence on buying decisions dropping by at least 20% compared to last year.
This year only 33.4% of parents expected to spend over $400. Last year the figure was 47.0%.
Beemer says that retailers will have to "scream 60% to 70% off" in order to see any shoppers this year. Virtually no one (1.8%) will pay full retail price in this economic climate, the survey found.
Only 13.3% of back-to-school shoppers are unsure where they will shop. Last year, that number was 35.7%. The big retail winner is Wal-Mart with 22.3% of consumers saying they will shop there, up from 15.4% saying they would shop there last year.
Other winners include Target with 10.5% saying they will shop there vs. 7.6% in 2008, Sears at 9.6% (6.4% in 2008) and American Eagle at 7.9% (6.4% in 2008).
Retailers holding steady are JCPenney (11.4%) and Old Navy (6.1%).
The study showed that parents are facing multiple financial issues. Today, only 21.8% of parents feel comfortable with their savings rate to pay for their child's college education. A large group (59.0%) believe that they will have to work three to five years longer to have enough money to pay for college tuition and/or their own retirement.
The ARG/UBS 2009 Back-To-School Survey consisted of 1,000 telephone interviews conducted Monday, Tuesday, Wednesday, Thursday and Friday, July 6-10, 2009, at America's Research Group headquarters in Charleston, SC. The error factor is plus or minus 3.8%.
America's Research Group, one of the nation's foremost consumer research and strategic marketing firms, marks its 30th anniversary in 2009. CEO Britt Beemer is a key resource and advisor to leading brands and top retailers. He is author of The Customer Rules, a new book published by McGraw-Hill.
UBS Global Equity Research provides the broad global perspective and in-depth analysis that institutional investors need to make good investment decisions. With more than 600 analysts, associates, strategists and economists in EMEA, APAC and the Americas, UBS covers approximately 85% of the world market capitalization - over 3,300 companies worldwide across 46 different markets. In addition to UBS's disciplined fundamental research, clients also rely on UBS for corporate and expert access to give them the insight they need, when they need it.
Barbara Burns (212) 486-1140