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Back To School Not Such A Retail Boost This Year

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Back To School Not Such A Retail Boost This Year

Business

Back To School Not Such A Retail Boost This Year

Back To School Not Such A Retail Boost This Year

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Parents of school-aged children have been in a discount state of mind this summer. Back-to-school shopping usually means stocking up on supplies and new clothes. However, with consumer confidence at its lowest levels since February, families haven't spent as much as retailers hoped. Host Liane Hansen speaks with Craig Johnson, president of retail consulting firm Customer Growth Partners, about what this means.

LIANE HANSEN, host:

Parents of school-aged children have been in a discount state of mind this summer. Back to school shopping usually means stocking up on supplies and new clothes. However, with consumer confidence at its lowest level since February, families haven't spent as much as retailers hoped. To tell us more about what that means, Craig Johnson is on the line. He's president of Customer Growth Partners, a retail consulting and research firm. Welcome to the program.

Mr. CRAIG JOHNSON (President, Customer Growth Partners): Hi, Liane.

HANSEN: What are the retailers telling you about this back to school shopping season?

Mr. JOHNSON: Well, what they're telling us and what we see in the malls and the key off-mall venues is that this season has been late, slow and anemic.

HANSEN: Well, back to school shopping is the second-biggest season for U.S. retailers. And it often predicts how busy the stores are going to be during the winter holidays. Is it a gloomy prediction this year then?

Mr. JOHNSON: Yes and no. Back to school is sometimes an imperfect predictor of the holiday season. Last year, it was down three percent and change, and the holiday season was actually up two. So, it's not always a predictor. What we're seeing this year so far - and it's not the end of the season yet - we're sort of at the last legs of it. But it doesn't bode all that well based on what we're seeing today.

HANSEN: Can you tell us what you think people are spending money on?

Mr. JOHNSON: Well, they're still spending money on apparel and footwear. Footwear has actually had a fairly decent season this year. But, again, it always does with the back to school and particularly in the elementary and high schools, as kids seem to gain two sizes sometimes over the summer.

But the other thing that's been pretty strong but not as strong as in past years is consumer electronics, which has become really a very important part of back to school beyond the traditional apparel, footwear and school-related supplies. The laptops, the cell phones, the BlackBerrys, the iPhones have had a strong season, relatively strong season. But, again, not as strong as the last year or two.

HANSEN: You mentioned that this back to school season can be an imperfect predictor of what's going to happen over the holidays. But can you tell at this point whether retailers are planning to order less holiday merchandise?

Mr. JOHNSON: Right now, we believe and what we hear around the industry is that some people who would have ordered up for this holiday season are now saying, well, wait a minute, let's either put off putting that order in or they are actually ordering a little bit less than they'd anticipated. So, they'll still order up but maybe not as high up for this holiday season as they might have when things were looking much rosier earlier this spring when retail was on a nice rebound.

HANSEN: Craig Johnson of the consulting firm Customer Growth Partners. Thank you very much.

Mr. JOHNSON: Liane, thank you.

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