Wide of the Mark

It's amazing how many individuals and organizations give the impression that they are the experts on their industry and yet, they don't seem to know a whole lot. Take, for example, the National Retail Federation, the world's largest retail trade association. It seems like only yesterday -- actually, it was just over five weeks ago -- that the NRF was talking up prospects for the industry's second-largest selling season:

Having outgrown shoes, shirts and even backpacks they’ve used the last two years, children heading back to school this year will arrive in style. The National Retail Federation’s 2010 Consumer Intentions and Actions Back to School survey, conducted by BIGresearch, found that the average American family will spend $606.40 on clothes, shoes, supplies and electronics [a 10.5% increase] compared to $548.72 last year, and close to the $594.24 in 2008. Total spending on school-aged children in grades K-12 is expected to reach $21.35 billion.*

Combined K-12 and college spending will reach $55.12 billion*, serving as the second biggest consumer spending event for retailers behind the winter holidays.

“We are encouraged by the fact that parents are eager to start their back to school shopping this year, but the industry still remains cautiously optimistic about recovery,” said NRF President and CEO Matt Shay.

However, based on the following New York Post report, "Schooling Shoppers," it appears that those who are supposed to be in the know are either hopeless dreamers or are members of the ever-growing Washington cheerleading squad:

Consumers are waiting for sales as retailers cut stock

This back-to-school season may teach consumers and retailers a cruel lesson.

Wallet-conscious parents are holding out for the steep Labor Day weekend markdowns on everything from three-ring binders to ring-spun denim. Meanwhile, retailers have kept inventories so lean that experts say eye-popping deals and consumer choices will be in shorter supply.

The likely result: many kids will be showing up for class in last year's duds.

"It's going to be a last-minute season -- and not necessarily a great one," said Steve Russo, president and CEO of FAB Starpoint, a New York firm that manufactures everything from notebooks to backpacks that bear the likenesses of popular characters like Hello Kitty, SpongeBob SquarePants and Spiderman.

Industry insiders say the malaise signals a new climate of lowered expectations in retail, with high unemployment and tanked housing prices damping consumer spirits. This month, hopes for the holidays have dimmed as retailers like Wal-Mart, JCPenney and Abercrombie & Fitch gave disappointing forecasts for the second half.

On the positive side, more parents last week had completed their back-to-school shopping than a year earlier, according to the National Retail Federation. Still, that figure stood at less than half of all households. If parents are finishing their shopping trips earlier, "that's probably because they're spending less," says Ken Perkins of Retail Metrics, an industry research firm.

Indeed, overall back-to-school spending will likely drop slightly from last year's already-depressed levels, falling 0.2 percent to $19.56 billion, according to IBISWorld. The industry research firm, which recorded a year-earlier decline of 5.4 percent, blames "high levels of unemployment and economic uncertainty."

Of course, it's possible that the NRF's July forecast was simply a mistake, right?

Comments

[Mark Stevens]

c'mon Panzner, what's the point of this post? You know and I know and the whole world knows that Industry spokespeople aren't "Experts", no one thinks they are anything other than Biased cheerleaders. Same with wall street "analysts" and "strategists". Please write about something helpful, like calling out economists who claim we are on the cusp of massive inflation whilst 10-year govt bonds are yielding 2.6%, practically the lowest on record. Thanks.

[vividvew]

NRF says "Combined K-12 and college spending will reach $55.12 billion"

Post says "overall back-to-school spending will likely drop slightly from last year's already-depressed levels, falling 0.2 percent to $19.56 billion"

Is it me or do these folks seem like they are not even talking about the same data set.

I gotta agree with Mish's take on this one. Ignore the fortune tellers and look at sales tax receipts.

-vividvew

[sharonsj]

I would think that most of the money being spent is going for electronics. The sales on paper are already insane now (like 19 cents for a notebook). And as for clothes, I think we can write off almost all retail clothing stores; they probably won't survive the depression. Why buy new clothes when you can find perfectly good stuff at thrift and consignment shops?

Clothes--we're getting a lot smarter. Why would Americans pay $40 for a blouse that cost $2 to make in China? And why would I buy anything made in China when it's going to fall apart in weeks if not days? If I'm going to buy a piece of crap, I'd rather find it in a thrift shop for that same $2. And we're such a nation of compulsive shoppers, I often find never worn clothes with the tags still attached. Just found a designer skirt with the original tags--it sold for $170 and I paid 85 cents. This is why retail stores are tanking.

[Youngworker]

I just bought all my graduate college supplies for less than 5 bucks.

[Rocky]

sharonsj: Good hunting. When I was in high school, I would occasionaly find text books during the summer at a local thrift store that I could resell to fellow students at a significant markup. Then free text books were introduced, putting an end to my money maker.

[Jordan 5]

The ring has no beginning or end, no point of weakness.