Back-to-School Spending to Fall for First Time in Nine Years

Cost-conscious consumers will be taking steps to keep their ​going back to school costs as low as possible, including many shifting to pay cash given the higher interest rates.

Back-to-school spending for K-12 students is expected to decrease by 10% to $597 per student, according to a new report from Deloitte.

In the past two years, parents have seen a 23.7% spike in the cost of school supplies.

This marks the first time in nine years that costs declined, Deloitte’s report said.

The report said that shoppers are likely to prioritize retailers with competitive pricing, favoring mass merchants (80%), online retailers (60%), off-price retailers, and dollar stores (both at 33%).

Cash will be used for 77% of purchases, up 5% from a year ago.

Nick Handrinos, vice chair and U.S. retail, wholesale and distribution, and consumer products leader for Deloitte, said that with budgets strained this season, continued high prices could dampen the excitement of the back-to-school season for many families.

“Consumers will likely prioritize where they spend money as they look to replenish their savings accounts and spend on experiences, such as summer vacations, over goods,” according to Handrinos.

“Parents are likely to be strategic about their spending to help ensure children are set up for success at the start of the school year by renewing school supplies but perhaps holding off on new clothing until needed. It’s not all bad news for retailers with many parents willing to splurge on certain items to treat their children, which may provide an opportunity for retailers.”

Nearly six in 10 (59%) of spending is expected to occur by the end of July, up from 53% in 2022.

Some parents couldn’t help but notice that many of the supplies purchased last year weren’t used and can carry over to the fall.

Meanwhile, Deloitte said that some K-12 parents plan to postpone nonessential purchases while replenishing necessities such as school supplies to help ensure their children are ready for the new school year.

“This cost consciousness is causing them to shop earlier, shop in-store to find the best price, and prioritize what they’ll purchase to start school, according to Brian McCarthy, principal, Deloitte Consulting. Some good news for retailers though: McCarthy expects ”a potentially strong season for brick-and-mortar, particularly among mass merchants who deliver a one-stop shopping experience.”