Show an ad over header. AMP

Another setback for retailers: an extinct back-to-school shopping season

A virtual school year will likely push retailers even closer to the brink.

Why it matters: Back-to-school season isthe second-biggest revenue generating period for the retail sector, after the holidays. But retailers say typical shopping sprees will be smaller with students learning at home — another setback for their industry, which has seen a slew of store closures and bankruptcy filings since the pandemic hit.


By the numbers: Research firm GlobalData expects the lowest level of back-to-school spending for elementary and high school students since 2015 — while spending for back-to-college shopping would crater nearly 40% from last year, per the Wall Street Journal.

  • Like some retailers, Carter’s, a kid apparel company, preemptively cut its back-to-school season inventory because “that event where mom needs new clothes...as a pressing need is not there right now," Brian Lynch, the company’s top executive, said last month.
  • Under Armour told Wall Street analysts last week it doesn’t know where schools are going to be opened, or whether sports will be played — which will affect back-to-school shopping demand.
  • Pinterest warned the unique back-to-school season could "lower both engagement and advertiser demand."

Where it stands: School — from pre-k to college — looks different everywhere for the first time ever. The "emerging patchwork of policies will make it hard for retailers to allocate inventory and target discounts effectively," as Bloomberg opinion columnist Sarah Halzack wrote last week.

What they're saying: "We’re seeing a reluctant and hesitant back-to-school shopper given the uncertainty and lack of clarity ... Many schools have not even published school lists” outlining what students should buy, Ravi Saligram, the CEO of Newell Brands, which manufacturers Sharpies, Elmer's Glue and Paper Mate pens, told analysts last week.

  • The back-to-school season alone accounts for 25% of Newell Brand's pens and marker business.

The other side: Electronics sales may see an uptick from virtual education.

  • The National Retail Federation anticipates a record-breaking back-to-school shopping season — because of more money being spent than ever before on computers and other electronics to better retrofit an at-home learning environment, though a ton of households may have already made that investment.
  • Michael Pachter, an analyst at investment firm Wedbush Securities, told MarketWatch any uptick in demand for electronics will “be offset by those households with one or more parents laid off or unemployed because of the pandemic,” who won’t buy new equipment.
  • According to a Deloitte survey of parents, high-income families expect to spend 6% more than last year on “back to college” supplies during the pandemic, while spending expectations dropped 12% for middle-income parents and 4% for low-income parents.

"It's not surprising to see who the biggest winners are," Jie Zhang, a retail management fellow at the University of Maryland's School of Business, said in a research note. "Companies like Amazon, Walmart, Target, Best Buy and Apple,” are best-positioned for the online learning shift, while traditional apparel stores will struggle.

The bottom line: The retail apocalypse is being accelerated by new realities caused by the pandemic, like virtual schooling. The result could be more dominance by the already biggest players that can quickly pivot.

  • Struggling retailers are still trying to lure customers to shop. Macy’s new ad campaign has the tag line: “No matter how we school, let’s be ready.”

FDA chief vows agency will not accept political pressure on coronavirus vaccine

Food and Drug Administration Commissioner Stephen Hahn promised that "science will guide our decision" for a coronavirus vaccine at a Senate hearing on Wednesday.

Why it matters: More Americans are expressing doubt about a first-generation vaccine, despite President Trump's efforts to push an unrealistic timeline that conflicts with medical experts in his administration.

Keep reading... Show less

CEO confidence rises for the first time in over 2 years, but still remains at decade low

Data: Business Roundtable; Chart: Naema Ahmed/Axios

A closely-watched CEO economic confidence index rose for the first time after declining for nine straight quarters, according to a survey of 150 chief executives of the biggest U.S. companies by trade group Business Roundtable.

Why it matters: The index, which still remains at a decade low, reflects corporate America's expectations for sales, hiring and spending — which plummeted amid uncertainty when the pandemic hit.

Keep reading... Show less

Career official says White House political appointees "commandeered" Bolton book review

A former career official at the National Security Council claims her pre-publication review of former national security adviser John Bolton's explosive book on President Trump was "commandeered by political appointees for a seemingly political purpose," according to a letter from her lawyers filed in court on Tuesday.

Why it matters: The White House fought against the publication of Bolton's book for most of the year on the grounds that it contained harmful and "significant amounts of classified information."

Keep reading... Show less

House Democrats unveil sweeping reforms package to curtail presidential abuses

House Democrats on Wednesday unveiled sweeping legislation aimed at preventing presidential abuse and corruption, strengthening transparency and accountability, and protecting elections from foreign interference.

Why it matters: While the bill has practically no chance of becoming law while Trump is in office and Republicans hold the Senate, it's a pre-election message from Democrats on how they plan to govern should Trump lose in November. It also gives Democratic members an anti-corruption platform to run on in the weeks before the election.

Keep reading... Show less

TikTok's content-moderation time bomb

When the dust finally clears from the fight over TikTok, whoever winds up running the burgeoning short-video-sharing service is likely to face a world of trouble trying to manage speech on it.

Why it matters: Facebook’s story already shows us how much can go wrong when online platforms beloved by passionate young users turn into public squares.

Keep reading... Show less

Making sense of China's very vague new plan to reach "carbon neutrality"

Major climate news arrived on Tuesday when Chinese President Xi Jinping said China would aim for "carbon neutrality" by 2060 and a CO2 emissions peak before 2030.

Why it matters: China is by far the world's largest greenhouse gas emitter. So its success or failure at reining in planet-warming gases affects everyone's future.

Keep reading... Show less

Less travel is causing the NBA to see better basketball

In addition to keeping out the coronavirus, the NBA bubble has also delivered a stellar on-court product, with crisp, entertaining play night in and night out.

Why it matters: General managers, athletic trainers and league officials believe the lack of travel is a driving force behind the high quality of play — an observation that could lead to scheduling changes for next season and beyond.

Keep reading... Show less

Senate Republicans release report on Biden-Ukraine investigation with rehashed information

Senate Republicans, led by Sens. Ron Johnson (R-Wis.) and Chuck Grassley (R-Iowa), on Wednesday released an interim report on their probe into Joe Biden and his son's dealings in Ukraine.

Why it matters: The report's rushed release ahead of the presidential election is certainly timed to damage Biden, amplifying bipartisan concern that the investigation was meant to target the former vice president's electoral chances.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories