* Shoppers worry about personal finances and the economy
* Back-to-school is second biggest retail selling period
By Dhanya Skariachan
Aug 11 Teenager Fanta Bagayoko personifies U.S.
retailers' worst nightmare this back-to-school season.
"I feel like the economy is messed up," the 18-year-old said
while shopping at a Walmart in New Jersey, for herself
and her niece. "Money wise, I still feel like we are in a
It has been more than three years since the official end of
the brutal U.S. recession, but Bagayoko and several other U.S.
shoppers said they are not feeling better about the economy or
their own finances, and are spending only on essential items.
That does not bode well for U.S. retailers that are hoping
for a much-needed sales boost after posting lackluster results
in the first half of the year. Back-to-school is the
second-biggest selling time of the year for U.S. retailers,
behind the winter holiday season.
With parts of the country such as Atlanta already sending
children back to class, the back-to-school season is in full
swing and retailers remain hopeful that shoppers will turn out
heading into the final stretch.
Kohl's Corp Chief Executive Kevin Mansell said the
back-to-school season "has been more and more bridging August
and September" based on his chain's research and other data.
"We used to see people starting in late July and I don't see
that as much anymore," said Maureen Bausch, executive vice
president of business development at the Mall of America, in
She expects people to finish their back-to-school shopping
in September once kids see what is cool in the classroom.
Total back-to-college spending is expected to reach $53.5
billion this year, while total spending by families with
children in kindergarten through 12th grade is expected to be
$30.3 billion, the National Retail Federation said.
While the trade group expects the average American family to
spend $688.62 on back-to-school shopping this year, a 14.1
percent increase from 2011, conversations with about a dozen
shoppers across the country indicate a different story.
Some on Wall Street, such as Anthony Chukumba with BB&T
Capital Markets, already worry NRF's sales forecast is "likely
aggressive" given the uncertain U.S. economic environment.
"Consumers have undoubtedly showed tentativeness in their
spending habits," said Rikard Bandebo, vice president and
economist of payment processor First Data. "Consumers' moods
will remain relatively downbeat until clearer signals emerge
that the economy is stabilizing again."
Weak income and employment growth are weighing heavily on
Americans, especially younger shoppers.
Teen employment is at its lowest level since 1964, making
more teenagers reliant on their parents to fund their
back-to-school shopping, said Jharonne Martis-Olivo, director of
consumer research at Thomson Reuters.
Many parents are not feeling good about the economy and the
uncertainty in an election year, and are taking precautionary
steps in case the economy deteriorates further, she said.
READING, WRITING AND REELING IN SPENDING
Shoppers from New Jersey to Arizona said they were shopping
for basics and making do with last year's supplies if possible.
"Unless the teacher says it is necessary, I am not going to
get it," said Bagayoko, the 18-year-old, who who headed to
Secaucus, New Jersey from Harlem, New York, to save money on
sales tax. Her shopping cart held only pens, pencils, folders
and other basics.
She is not alone in being frugal.
"I am not buying the swankiest of anything," said Ann
Miller, 47, while shopping for her son Zachary, 8, at the same
Walmart store. "I am feeling worse about the economy."
As school districts with strained budgets ask parents to buy
more items that in the past would have been supplied by the
schools, many parents push kids to make do with old items, shop
at discounters or buy only what they really need.
"The school list is longer, but I am trying to get (just)
the basics," said Yamila Pichardo, 35, mother of three
school-going kids, who said she plans to reuse her kids'
Some teenagers decided they would be more careful with their
"I just go shopping when there is a good sale," said Laine
Vasquez, 16, who lives in Phoenix, Arizona.
Vasquez, who did most of her shopping at Kmart and
Target, said she spent a lot less on makeup this year.
Sandy Johnston, a 55-year old accountant from West Seattle,
said he was pleasantly surprised when his 18-year old daughter
opted to buy clothes at second-hand stores ahead of her freshman
year at college. Johnston could use some help, especially as he
will now be sending two kids to college instead of just one.
"We are borrowing this year to fund a lot of things that we
normally would not have borrowed to do. It makes me nervous, we
are selling our second home to help pay for things," he said.
Even those who feel a little better about their finances are
changing their shopping habits to get more bang for their buck.
Susan Crew, 46, of Charlotte, North Carolina, expects to
spend a little more this year because she's been making more in
commissions in her architectural products sales job. But she is
doing more online research before she makes purchases.
Crew, who has two school-going sons, said she was looking
online for L.L. Bean backpacks and made a trip to the Belk
department store to buy shoes for her eighth-grader after she
scored a coupon through a Facebook advertisement.
Some shoppers said the back-to-school discounts so far were
about the same as last year.
"I have seen a lot of ads, but not necessarily discounts,"
said Lisa Mishkin of Chicago, who is shopping for three girls.
That might change later in the season as retailers get a
better read of the state of the U.S. consumer, experts said.
Chris Donnelly, the global head of Accenture's retail
practice, was among those who predicted there would be more
aggressive promotions in the rest of August and September this
year versus 2011.
Many stores and mall owners are not waiting to woo shoppers.
Department store chain Macy's is holding a "Spelling Bee"
contest in some stores, while rival J.C. Penney is
offering free haircuts for children this month at many stores.
"A unique challenge for retailers with back-to-school is the
fact that it doesn't have one particular day around which
retailers can plan their promotions," said Catherine Moellering,
head of global retail consulting firm Tobe.
That might be addressed after chains such as Aeropostale
, Gap, American Eagle, Pacific Sunwear
and Guess took part in Teen Vogue's first
"Back-to-school Saturday" initiative on August 11.
"I think it is a win-win" for both shoppers and retailers,
Several stores at Mall of America also offered 20 percent
discounts on Back-to-school Saturday, which coincided with the
giant Minnesota mall's 20th anniversary, noted Bausch.