The data: Parents plan to spend an average of $489 per child on back-to-school shopping this season, up 11.7% YoY and well above the current 3.5% inflation rate, per a JLL survey of 1,022 parents.

However, the gap between consumers’ stated budgets and their actual spending can be wide, which is why we expect back-to-school retail sales to rise a far more modest 3.3% this year to $85.42 billion. Some of that increase will likely be driven by inflation, which is casting a long shadow on consumer spending patterns, as 64% of parents say it will affect how they shop this season.

New NRF data points to a similar dynamic: 62% of back-to-school shoppers had started shopping by early July, down from 67% a year earlier, as more consumers pace purchases and seek to stretch their budgets. Among those who hadn’t completed at least half of their purchases, 46% said they were waiting for the best deals.

Zooming in: Not surprisingly, lower-income parents are the most worried about the cost of back-to-school items. Inflation-concerned families earning under $50,000 spend about $188 less per child than unconcerned peers in the same bracket, per JLL. Consumers’ discretionary spending fell for the second consecutive year, dropping to about 56% of back-to-school budgets from roughly 60% last year.

That restraint is influencing shopping behavior as well as spending levels. NRF found that 47% of back-to-school shoppers plan to buy only the essentials needed for the start of the school year and replenish supplies as needed throughout the year.

The opportunity: Several retailers are sharpening their value positioning.

• Walmart says it is offering its lowest prices since 2019 on the 14 most common classroom-list items while expanding its assortment of value-focused school supplies, apparel, and grocery essentials.
• Dollar General and Staples are holding prices on key back-to-school items at 2025 levels.

Implications for retailers: Retailers with strong value-oriented positioning and messaging are poised to benefit. That helps explain why Walmart’s share of parents’ planned shopping destinations surged more than 22 percentage points to nearly 80%, the highest level in JLL’s survey history, and why dollar stores entered the top 10 for the first time, reaching nearly 32%.

While the environment is challenging, retailers that can consistently deliver and communicate value can gain share.