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High prices slow down back-to-school shoppers

Back-to-school shopping started earlier and will end later than ever for Jennifer Kapper this year.

"We're living paycheck to paycheck, so this year we're stretching back-to-school over as many paychecks as we can," said the 41-year-old Seminole mother of two. "Right now, any teacher wish list for extra supplies is out. And we'll make do with the clothes we have at least until fall."

She blames the usual suspects: gas and food prices taking a bigger bite out of the family wallet and a lingering housing slump that has hit both her husband's tile business and her own interior decorator job.

"I was really disappointed when the state decided not to have another back-to-school sales tax holiday this year," she added.

Ditto all that for Florida retailers. They started promoting back-to-school season three weeks earlier than usual, in mid July, hoping to stretch what was a three week season into six. They've turned on the deep discounts to woo frugal shoppers who are trading down and putting off purchases to make their money go further.

"Retailer expectations are very low in Florida this year," said Cynthia Cohen, president of a Coral Gables retail marketing firm. "Parents are doing something I haven't seen in years: scrimping on their children. If they won't accept clothes from Ross or Wal-Mart, the parent ticks off how much more they're paying for gas."

The frugality even extends to college students confronted with higher tuition and textbook prices. Surveys show college back-to-school spending will be down 7 percent, ending a six-year run-up fed by trendy dorm furnishings.

"Economic times are tough so students are being frugal about clothing, furnishings and electronics," said Phil Rist, president of Big Research, a market research firm. "They may opt for cheaper model, use a family computer or take advantage of a computer lab."

Federal economic stimulus checks of $300 to $1,800 for families helped keep shopper traffic brisk so far, mall marketing managers say, even after most consumers used the extra cash to pay down credit-card debt. But shoppers are mostly responding only to price promotion.

Retailers are singing the blues about losing the 10-day sales tax holiday this summer that provided an extra incentive for eight of the last 10 back-to-school seasons.

"It's a shame we lost the sales tax holiday in a year when people could needed it the most," said Rick McAllister, chief executive officer of the Florida Retail Federation, a statewide trade group.

Firms that track retail spending expect a modest sales gain for the season nationally although estimates vary by the type of spending. But Florida has been an epicenter of the housing slump and weak retail sales.

The National Retail Federation on Tuesday estimated the average K-12 family budget this back-to-school season inched up $31 to $594 while average spending for each college student shrunk by $42 to $599.

Expected to be hardest hit will be apparel retailers, except for discounters like Ross, TJMaxx, Target, Wal-Mart and wholesale clubs. JP Morgan analyst Brian Tunick forecasts 16 of the 35 specialty apparel chains he follows will post a sales drop in July for stores open more than year. Mike Niemira, who monitors 77 retail chains as chief economist for the International Council of Shopping Centers, forecasts a modest sales gain of 2 percent for the two-month season. Adjusted for inflation, that's below last year and would be the worst sales performance for family apparel since the 2001 recession.

Already, stores are trying all manner of promotions to stimulate buyers. Malls are awash in 50 percent off signs, sweepstakes and special events. Target touts "temporary price cuts" on seemingly every aisle, and Sam's Club is discounting its $40 membership fee for college students with a $15 gift card and allowing roommates to use one membership.

Westfield Brandon awards $10,000 to a local school whose registered supporters spend the most there. Tyrone Square in St. Petersburg on Friday stages the only Florida stop of the six-hour Simon dTour that features giveaways, demonstrations of new products, entries in a national karaoke contest and a concert by the British rock group Your Vegas.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

>>FAST FACTS

Back-to-school spending

Parents and students plan to spend $51-billion, but only a shade more than last year for K-12 and 7 percent less for each college student. Here are the spending intentions by category. Numbers have been rounded:

K-12 family

Budget: $594, up from $563

Clothing: $234, up from $231

Electronics: $151 up from $129

Shoes: $109, up from $108.

School supplies: $98 up from $94

College (per student)

Budget: $599, down from $641

Electronics: $211, down from $258

Clothing: $134, down from $149

Room furnishings: $90, down from $109

Supplies*: $68, up from $63

Shoes: $58, down from $59

Collegiate gear: $35, no change.

*Does not include textbooks.

Source: BIGresearch

High prices slow down back-to-school shoppers 07/22/08 [Last modified: Thursday, July 24, 2008 11:20am]
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