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Slow Back-to-School Sales Expected for Small Retailers

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August 24, 2004--Back-to-school now means 'back -to-college' to most retailers, although smaller retailers are expected to have a harder time keeping up with the change, according to the National Retail Federation.

An anticipated record-high boom, fueled by a recent industry-wide marketing shift from kids to college students, is less likely to reach smaller retail outlets who are unable to adapt to the new market, said NRF spokesperson Ellen Davis.

In a study released last month, the NRF forecast a $34-billion spending spree this year by both students and their parents, an 18 percent increase in sales from last year. According to the study, a full 33 percent of would come from college students alone.

"The back-to-college market is still just a few years old," Davis said. It might be so new, Davis added, that smaller stores may find it challenging to "test the waters" without alienating their customers.

While clothing outlets have long profited from the back-to-school season, other retailers, like furniture stores, are just getting into the game, Davis said, adding that college students today have more money to spend than every before.

The NRF study, released in July, noted that students heading off to college often need to duplicate furniture, appliances and computer hardware from home. They foresee some 40 percent of total sales this year coming directly from the pockets of college-bound students. "That's something we've never seen before," said Davis.

Back-to-school sales are second only to the winter holidays as the highest of the year. They are also an important indication of year-round consumer spending.

While the NRF sees big gains from college students, the outlook is less optimistic for the kindergarten to grade 12 market, which is expected to drop by some 8 percent over last year.

Davis said parents of younger students are unlikely to replace high-end computers and other hardware year on year. Still, according to the study the biggest selling items this summer are expected to be shoes, tracksuits and jeans. The final tallies for this summer will be released next month.

Last updated: Aug 24, 2005




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