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No. 1 on back-to-school shopping lists this year: bargains

Depressed economy will push 85% of shoppers to reduce spending, according to a survey by the National Retail Federation.

July 15, 2009|Andrea Chang

Coupons and discounts will be the hottest styles for back-to-school shoppers this year.

Summer is not even half over, but retailers throughout the Southland are gearing up for back-to-school season with new youth fashions, nifty office supplies and steep bargains.

"All eyes are shifting to back-to-school -- it's the only catalyst where consumers have to go out and spend between now and the holiday shopping season," said Ken Perkins, president of research company Retail Metrics Inc. But "you look at things heading into the season, and the macro picture on the spending front isn't promising. It's really going to be need-based, bargain-based, discount-based shopping."

The depressed economy will cause 85% of Americans to make changes to their back-to-school plans this year, according to a survey released Tuesday by the National Retail Federation trade group.

The average family with students in kindergarten through high school is expected to spend $548.72 on back-to-school merchandise this year, a decline of 7.7% from $594.24 last year, the survey found.

Total back-to-school spending is expected to reach $17.42 billion.

At a Target in West Hollywood on Tuesday, Karen Dillon, a stay-at-home mom, said she would spend 25% to 30% less on back-to-school items for her two daughters this year.

"I'm going to buy less and I now have a rule -- I don't bring the kids with me," Dillon said. "There's only so much pleading I can take before I give in."

Shopper Robin Hamilton, 48, said besides buying mandatory uniforms for her 12-year-old daughter, Alana, she planned to spend only $20 on school supplies and $40 on accessories for the new school year.

"I'm going to look through her backpack and say, 'These markers are fine, these pencils are fine,' " she said. "We're only going to replace what's not usable."

To save money, back-to-school shoppers plan to hunt for sales more often (56.2%), spend less overall (49.6%), purchase more store-brand or generic products (41.7%) and increase their use of coupons (40%).

"The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers," said Tracy Mullin, president of the retail federation. "As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shoppers this year."

The recession has pushed retailers to roll out back-to-school merchandise earlier and to get creative in their marketing strategies.

J.C. Penney Co. on Tuesday unveiled a comprehensive social media campaign to promote its back-to-school offerings, including a Facebook page and a special website for teens. The department-store chain also will send discounts via text message to back-to-school shoppers.

"We knew it would be a very challenging back-to-school season coming up," said Quinton Crenshaw, a J.C. Penney spokesman. "Style, quality and affordable prices is really our mantra, and we want teens and families to know about that. Obviously, it's more relevant than ever right now given the economy."

Spending in most back-to-school categories is expected to decrease, with one bright spot: electronics. With laptops and computers increasingly affordable for many families, spending on electronics is expected to increase 11%. According to the survey, the average family plans to spend $167.84 on electronics, compared with $151.61 last year.

The poll of 8,367 consumers was conducted from June 30 to July 7 and has a margin of error of plus or minus 1%.

Although discount stores will be the most popular destination for back-to-school shoppers, 21.5% of families plan to shop at drugstores to get ready for school, compared with 18.2% last year. Drugstores have become more popular recently as their merchandise mix has broadened to include school supplies, small electronics and groceries.

Back-to-school season is a busy time at Rite Aid stores, spokesman Eric Harkreader said. The drugstore chain is rolling out its back-to-school merchandise this week and devotes a sizable amount of floor space to school supplies from July through August.

"Obviously, people are watching their budgets and are looking for promotions and value," Harkreader said. "We really expect the basics to be the biggest thing this year: Composition books, loose-leaf paper, No. 2 pencils and crayons are really what we think will drive the season."

A dismal back-to-school season could mean more trouble ahead for the battered retail industry.

"Back-to-school and holiday shopping is pretty close and highly correlated," Perkins said. "A particularly weak back-to-school would not signal positive things for the upcoming holiday shopping season."

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andrea.chang@latimes.com

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(BEGIN TEXT OF INFOBOX)

Cutting back

Families plan to spend nearly 8% less than last year on students in kindergarten through 12th grade. Here's where the money is going, per family:

Electronics: $167.84, up 11%

Clothing, accessories: $204.67, down 13%

Shoes: $93.59, down 15%

School supplies: $82.62, down 16%

Source: National Retail Federation

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