Back to School shopping surges despite inflation and economic uncertainty

Summer is never quite complete without back-to-school shopping, is it? Despite inflation, a looming economic crisis, and changing consumer behaviour, parents continue to be resilient buyers when it comes to shopping for their kids after the summer holidays. Essentials like school uniforms and supplies like books, stationary etc. are key expenditures this month, and if survey results are to be believed, customers with children aren’t cutting back.

Resilient to Inflation

For many families, economic sentiment is deteriorating and 54% expect the economy to weaken in the next six months. Many find themselves struggling financially. According to a recent survey by Deloitte, 33% report their household financial situation has worsened since last year (vs. 22% in 2021), and 57% are concerned about inflation’s impact on the cost of school products. However, parents are still making it happen. Thirty-seven percent of parents plan to spend more than last year, which will result in an 8% annual increase, amounting to $661 per child versus $612 in 2021.

According to an NRF report, 56 percent of back-to-class shoppers had started browsing and buying as of early July, up from last year’s 51 percent and considerably higher than 44 percent in 2019. Whether it is to stretch out their budget, plan for possible product delays or take advantage of deals and promotions, consumers are getting a head start on their shopping.

“Convenience and competitive prices are the main two factors that control consumer habits when choosing where to shop. For the last two years, virtual classes have affected back-to-school season enormously, with stationary sales dropping by almost 50 percent in 2020 before it recovered slightly in 2021. Interestingly, the demand for stationary was compensated by electronics as parents prepared for home schooling with printers, toners, laptops, tablets and more. This year, we expect stationary sales to reach pre-pandemic levels as students return to the classroom and we are proud to be supporting families across the UAE,” said Christophe Orcet, Head of Commercial and Operations of Carrefour UAE at Majid Al Futtaim Retail.

A Welcome Shift

With the active de-stigmatisation of mental health and open and honest conversations about wellbeing encouraged more, another welcome trend is being seen where parents are prioritising their children’s mental and physical wellbeing, which is then being reflected on to their shopping patters. With children growing up with more social pressures than ever before and the disruptions brought about by Covid-19 to their educational and physical activities, many parents are wondering how to take a more holistic approach to their well-being. As students prepare for their return to school, there’s a need to not only encourage physical activity, healthy food, and proper nutrition but to do so in a stress-free environment that will enable children to be healthy while having fun.

As reported by PwC, 71% of Middle East consumers stated that they became healthier during the pandemic. Furthermore, 41% said they are inclined to pay more for healthier grocery options. A recent YouGov survey confirmed that while UAE consumers will cut down on excessive spending, especially when it comes to eating out, they will still continue to value high-quality, nutritious food ingredients and essential staple food items.

The Deloitte survey noted that, as a result of the pandemic, K-12 parents reported planning to spend on products that encourage mental wellness, including items for extracurricular activities. Parents concerned about their child’s mental health (50% of respondents) plan to spend 8% more than the average back-to-school shopper.

“The back-to-school season is one of the biggest events of the year for the retail industry, however, two years into the pandemic, we are noticing a huge shift in consumer demands while the market sentiment has remained extraordinarily resilient in the face of uncertainty and challenges,” said Mohammad A. Baker, CEO and Deputy Chairman of GMG. “Encouraging children to embrace and enjoy a healthier lifestyle is a key component of GMG’s efforts to promote well-being and improve the lives of children across the communities we serve. Whether it is Géant, Supercare Pharmacy, or Sun & Sand Sports, this BTS season, all our business divisions are providing a great opportunity to do just that, ensuring the return to school is a happy and healthy time for both children and their families.”

Not All About Deep Discounts

Now BTS season has proven to be a crucial time for retailers where a lot of the yearly budgets are set based on the expected expenditures and revenues around this period. Considering inflation and economic crisis is top of mind for many customers this year, most retailers turn to the safe option of offering deep discounts to the price conscious consumers.

“We launched our annual “Back to School” promotional campaign coinciding with the start of the new school season, with its first campaign on August 12, 2022, offering a discount of more than 65% on hundreds of products and school based items,” said Dr. Suhail Al Bastaki, Director of Happiness & Marketing Dept. at Union Coop. “We have invested quite a lot of money in the campaigns to reduce the prices of products and schools stationery.”

As many brands frame their campaigns around inflation by offering discounts, some have realised that value to customers doesn’t necessarily mean monetary. It may mean an emotional connect, alignment with their values of sustainability, or catering to a niche category of products.

Niche is Nice

Many parents of K-12 students are willing to spend more for sustainable products, with 50% choosing environmentally friendly or responsibly sourced products when possible. Forty-seven percent of back-to-college shoppers surveyed by Deloitte also choose sustainable products when possible and report spending 19% more than the average back-to-college shopper.

French Toast, a schoolwear brand dedicated to the students, educators and communities it serves, is delivering on its mission to help all kids shine with the launch of its new French Toast Adaptive collection.  French Toast worked closely with the community of people with disabilities (PWDs) to create a collection that authentically meets the needs of students with disabilities and those seeking sensory-friendly options.

“Every child deserves to feel comfortable and confident when they go to school and have as much independence as possible to get dressed on their own. The process by which our design team developed the collection demonstrates our dedication to taking an authentic approach. We are proud to be supporting PWDs and helping to raise visibility for this underserved community.” He continued, “It was important for French Toast to keep the product at our everyday great value – which is why we kept our prices the same across the board. The most important thing for us is to be inclusive and do the right thing,” said Stephen Ashear, President of French Toast.

With Dubai Summer Surprises offering big basket deals, discounts and an array of enticing offers until September 4^th, customers in the UAE can capitalise on what the regional retailers are planning this back-to-school season.

#BackToSchool UAE 2022: What’s on offer?