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Thursday, August 1, 2013

Forecast For Back-To-School Shopping

Andy and Aimee Smith, background, and their children Ian, left, and Riley shop for back-to-school clothes during the first day of the sales tax holiday at J.C. Penney in Eastdale Mall in Montgomery, Ala. in August 2011. (Mickey Welsh/Montgomery Advertiser via AP)

Andy and Aimee Smith, background, and their children Ian, left, and Riley shop for back-to-school clothes during the first day of the sales tax holiday at J.C. Penney in Eastdale Mall in Montgomery, Ala. in August 2011. (Mickey Welsh/Montgomery Advertiser via AP)

The back-to-school shopping season has begun, and retailers are hoping consumers will be in the mood for clothes, shoes, back packs and computers.

The cold, rainy spring depressed sales as the old school year ended, so fingers are crossed for better results for the new academic year.

KUHF’s Andrew Schneider and NPR senior business editor Marilyn Geewax look at the mood of consumers as communities offer sales tax holidays to boost interest in shopping.

Guest

Transcript

ROBIN YOUNG, HOST:

Well, for many retailers it is on - the scramble to win over back-to-school shoppers. This month is second in importance only to the holiday shopping season, retailers hoping to move mountains of backpack, shoes, notebooks, and economists watching to see whether parents buy in and buy. Marilyn Geewax, senior business editor at NPR, has been monitoring this. Hi, Marilyn.

MARILYN GEEWAX, BYLINE: Hi.

YOUNG: And she's written about it with Andrew Schneider, a reporter from KUHF in Houston, who went out to talk with shoppers. Andrew, welcome to you as well.

ANDREW SCHNEIDER, BYLINE: Thanks so much for having me.

YOUNG: And I want to start with Marilyn. Just - we kind of know that back-to-school shopping is important, but remind us why.

GEEWAX: Well, the National Retail Federation estimates that if you put it all together - the back-to-school shopping as well the college shopping, which can be pretty expensive too - it adds up to more than $72 billion. And that's really a lot of money. It's the second busiest season after the holiday season. So for retailers this is really an important time of year.

YOUNG: The stores are concerned. Andrew, you did some reporting there in Texas about this back-to-school shopping season. Tell us about that.

SCHNEIDER: Texas is now one of 18 states that's declared a break from sales taxes. In Houston the state and local taxes add up to about 8.25 percent, so that's a lot. If you spend $100 in clothes for the kids, you need to pull out another $8.25 for the tax. But next weekend that tax will not be levied. And of course stores will be offering lot of sales at that time. But there are all sorts of questions to how effective that is.

A lot of economists are concerned that it's inefficient. There is some evidence that suggests that rather than increasing sales overall, it's just moving them around from one week to another. People will simply advance the amount of sales that they were planning on doing anyway by one week. And then there are all sorts of questions about, you know, the overall effectiveness if you're favoring one group of products over another.

Texas, for example, the sales tax break will cover things that really help out, you know, younger students, K-through-12, things like clothes and backpacks and so forth. But if you're an older student in high school or college and you need to get a computer, there is no break on electronics.

YOUNG: How much on average does the average family spend on back-to-school stuff?

GEEWAX: It's somewhere in between 600 and 700 dollars per family when there are school-aged children involved. But if you look at college students, it's higher. It's more like eight, nine hundred dollars per family because of course college expenses are higher. You've got to get that nice bean bag chair in the corner of your dorm room, and you've got to have a laptop. So it's - the older the kids, the more expensive.

YOUNG: And Andrew, you've been out, you know, among the shoppers. What's the sense that you're getting?

SCHNEIDER: They're reining in their spending, in part because I mean they spent a great deal more last year than they had in recent years. You know, they're not going to buy more than they need. One of the odd twists in this I found was something that some of the people I spoke to referred to as the Yogi Berra effect. And you have a huge number of people that are piling into the stores for these sales. And that's actually going to be a turnoff for some shoppers.

GEEWAX: You know, no matter what economists say about how effective or not the tax policy is, it's popular with the lawmakers because they hear from their constituents, both the retail store owners as well as shoppers who want this holiday.

So in fact just yesterday the Massachusetts legislature finally got around to passing its sales tax holiday for August 10 and 11. Now, that's taken pretty close down to the wire. The stores will have to scramble to get their sales organized and their promotions around that. But in the end the legislators in Massachusetts realized that really this is very popular, and they didn't want to be on the wrong side of their constituents.

YOUNG: Hmm. That's Marilyn Geewax, senior business editor at NPR, and Andrew Schneider, reporter at the HERE AND NOW contributing station KUHF in Houston. Thank you both.

GEEWAX: You're welcome.

SCHNEIDER: Thank you.

(SOUNDBITE OF SONG, "TING-A-LING")

JEREMY HOBSON, HOST:

Well, that really makes me want to buy some pencils and glue, Robin. I don't know about you.

YOUNG: Me too. Spiral notebook, I want one.

HOBSON: From NPR and WBUR Boston, I'm Jeremy Hobson.

YOUNG: I'm Robin Young. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.


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