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Back-to-school sales a test for retailers

Debbie McWilliams, left, of Massapequa Park, and her

Debbie McWilliams, left, of Massapequa Park, and her daughter Tara, 11, shop together for back-to-school supplies at Walmart in Farmingdale on Aug. 13, 2015. Photo Credit: Daniel Brennan

Long Island shoppers are likely to spend more on back-to-school items, but wait until late in the season before filling up their shopping carts, retail analyst Marshal Cohen of Port Washington-based NPD Group predicts.

If they spend more than last year, Islanders will be bucking national expectations.

The average U.S. family with children in grades K-12 plans to spend $630.36 on electronics, apparel and other school needs, down from $669.28 last year, according to the National Retail Federation's back-to-school spending survey. Families with college students will spend an average of $899.18, down slightly from $916.48 last year, said the NRF, a trade association based in Washington, D.C. The last time spending per family was down was in 2013.

Reasons for the expected decline in spending run from the falling price of electronics to students having leftover school supplies, to families focusing on buying only necessities, and to shoppers waiting to pick up items that they can buy all year long. Combined spending for school and college will drop to $68 billion, according to NRF, from $74.9 billion last year.

Back-to-school shopping is the second-largest season for many retailers after the Christmas holiday season, making it a key time for retailers on Long Island and in the nation. It is also regarded as an indicator of how willing consumers will be to open their wallets for the holidays.

The holiday season brings in roughly $616 billion in spending nationally, with 93 percent of the population shopping. For the back-to-school shopping season only about 30 percent of the population is shopping, according to NRF.

"Back-to-school is an indicator of consumer sentiment and momentum," said Cohen of NPD, a market research company. "The fact that back-to-school is already showing signs of neutrality -- not great or bad -- is a good indication that the holiday won't be that different."

Cohen thinks, however, that Long Islanders will wade into the malls and spend more this season, despite NRF's weaker national outlook, because Long Island has a history of more robust retail spending than the nation.

"School is a priority for the Long Island resident and ultimately the Long Island consumer," Cohen said. "Parents would go without spending on themselves, so they can spend on their children. Spending will be up, but shopping will be done later than ever."

Parents want kids prepared

Parents say they want their kids to be ready for the new school year. "Now that we're back from vacation, we want to focus on back-to-school shopping," said Karen Haggerty of Garden City as she shopped for clothes with her children -- Kaelin, 12, and Owen, 10 -- in the JCPenney store in Roosevelt Field mall. "It's important that they look good."

For Long Island retailers who have struggled with the growth of online shopping, one bit of good news is that consumers still overwhelmingly prefer physical stores for back-to-school shopping. About 83 percent of U.S. shoppers' purchases for school involve a store, including 7 percent of purchases that will be made online and picked up in-store, according to the International Council of Shopping Centers' back-to-school shopping survey. However, about 79 percent of respondents plan to use a mobile device while shopping in-store for back-to-school, it found.

The back-to-school shopping season normally bodes well for discount stores, office supply stores, department stores and apparel specialty stores. About 92.7 percent of back-to-school shoppers will purchase new apparel, and 94.1 percent will head out for new school supplies, according to NRF.

"I am going for the essentials," said new SUNY Plattsburgh freshman Samantha Lunetta, 18, of Port Jefferson, who bought jeans, sweaters and makeup from Forever 21, Wet Seal, Cotton On and Sephora at Smith Haven Mall.

Most consumers are planning to start shopping for clothing much later in the traditional June-to-August back-to-school shopping season, and many are expected to finish after school starts, according to an NPD national survey. About 54 percent of survey respondents said they would start shopping in August, once considered the end of the season.

"We tend to now buy what we need when we need it," said Cohen. Even though many of Long Island's public schools are starting before Labor Day, which is earlier than usual, shopping now extends into September. "We prioritize buying. First are school supplies, then second basic essential items like underwear and socks, and then the fashion."

Shift to September

For Love My Shoes retail chain store owner Robert Yeganeh, his busy period is from mid-August to mid-September. His website and stores in Oceanside, Bayside and Babylon sell women's shoes, handbags and accessories. His new store in Huntington is set to open this week.

"Back-to-school has shifted more to a September business, because the customer wants to go back to school and see what their peers are wearing," said Yeganeh, who said Love My Shoes has been around for 20 years. "The fashion-conscious ones will buy earlier. With the climate changes, it is more weather appropriate to buy new shoes like boots and booties in September."

Shopper Victoria Saladino, 18, of Selden, who will be a sophomore at SUNY Potsdam, has done some light shopping but is holding off on buying winter shoes and clothes for college.

"I procrastinated so that I don't have to think that I am going back," said Saladino, who was shopping at Smith Haven Mall with her friends Libby Liszanckie, 19, of Shelter Island and Taylor Prosper, 19, of Potsdam.

Despite the later buying trends, back-to-school ads are creeping earlier and earlier. The ad blitzes now begin soon after July 4, according to Kantar Media, a marketing research firm based in Manhattan. Last year Target spent about $35 million in back-to-school ads, JCPenney $18.9 million, Walmart $17.9 million and Kohl's $15.7 million.

Families with children in grades K-12 plan to spend less on electronics this year, an average of $197.24, compared with $212.35 last year, according to NRF. College students' electronics purchases are also expected to drop, to $207.27, down from $243.79, NRF found.

"Electronics are cheaper now," said Mike Balale, general manager for JCPenney in Roosevelt Field mall, adding the retailer sells popular items such as tablet lap holders, cellphone car mounts, universal chargers and extended batteries for phones. "They're not spending as much, but that's because we are charging less for items."

Some wait for discounts

Back-to-school spending also fluctuates according to students' needs, as some families don't need new clothes, shoes, electronics and school supplies every year. Other shoppers wait to buy computers, smartphones and tablets during the holiday sales.

"Many consumers are noticing that the heavily priced discounts sort of creep up around Halloween, so they wait to buy big-ticket items," IHS Global Insight economist Chris Christopher said. There are "no must-buy items out there now."

At Walmart, spokeswoman Molly Blakeman said: "The biggest change that we are seeing is that customers are demanding more of a seamless shopping experience." She said adding customers are doing their research online: "They will shop online and pick up in stores for free."

In the quest for back-to-school bargains, more than half of college students use their phones to comparison shop before making a purchase, and more than one-third of K-12 parents search for coupons and online deals with their phones, according to consumer financial services company Synchrony Financial, based in Stamford, Connecticut.

"Retailers have to serve up a very user-friendly mobile experience," said Danielle Conte, a retail consultant and founder of the shopping blog in Centerport. "The brick-and-mortar retail employee has to be well versed about the online experiences, what is being offered online and how the mobile app works. That's where I see an information gap sometimes."


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