Consumers Seek Value as Back-to-School Budgets Tighten
Consumer spending during the back-to-school shopping season is forecast to be lower than 2024, with shoppers at higher income levels expected to tighten their budgets for classroom-related products.
A new survey of shoppers by Deloitte revealed that consumers are expected to spend $570 per child in preparation for the 2025-26 school year, a drop of $17 from 2024 and down $91 from 2022. Additionally, 40% of consumers are showing signs of value-seeking, making more cost-conscious choices, deal-driven purchases, and convenience sacrifices.
According to Deloitte, parents surveyed plan to focus their back-to-school purchases around big promotional events in July, spread out expenses over a longer period, trade down to more affordable brands and retailers, and even scale back on speedy delivery for more affordable, slower shipping.
Notably, lower-income parents surveyed said they plan to spend 10% more year-over-year, while middle- and higher-income parents expect to spend 7% and 9% less, respectively. Two-thirds of families making $50,000 or less per year said they will spend more because of higher prices, half of those making between $50,000 and $99,000 annually said they have less money to spend, and 60% of those making $100,000 or more said they were worried about the U.S. economy.
“Parents are laser-focused on preparing their children for the school year, but we expect back-to-school spending to remain flat amid economic headwinds and financial concerns across income groups,” said Natalie Martini, vice chair and sector leader of U.S. Retail & Consumer Products with Deloitte. “Consumers are expecting higher prices on back-to-school items this year, so they’re looking for ways to save. Despite these pressures, children’s influence on their parents’ spending remains strong, and extracurriculars remain a priority for most parents, who continue to value their importance to a child’s well-being.”
Survey respondents expect to increase their spending on clothing and accessories, up 6% to $13.4 billion. Spending on all other categories is expected to decline: technology (-8%); school supplies (-3%); and other home and health products, including personal hygiene items and educational furniture (-12%).
Mass merchant retailers continue to lead the way, increasing by six percentage points year-over-year, with more people planning to shop retailers in this channel of distribution. They’re followed by online and off-price retailers, dollar stores and warehouse membership clubs.
Additionally, Deloitte’s survey also found that those looking for deals may sacrifice loyalty: 75% say they will shift brands if the preferred brand is too expensive (versus 67% in 2024), 65% say they will shop at more affordable retailers (versus 62% in 2024), and 50% will shop for private labels over name brands (flat year-over-year).
Younger parents are also turning to social media for their back-to-school shopping needs. In the survey, 75% of Gen Z parents and 46% of Millennials parents plan to use social media for their back-to-school shopping, with both groups likely to spend 1.8x more compared to others who don’t use social media.
