Back-to-school basics: Shopping forecasts and what’s at stake

Back-to-school season at a glance

The back-to-school season is retailers’ second-biggest after Christmas. And with confidence in the economic recovery stalling, they’re in a tough fight for shoppers’ dollars.

TEEN RECESSION HANGOVER: The slump for the teen chains, which had routinely posted strong sales gains for a decade or more, began in 2008 with the recession. Teen unemployment has since risen steadily and is now at 26 percent. In good economic times, the unemployment rate for the 16-to-19 age group averages between 13 percent to 15 percent, says John Challenger, CEO of Challenger, Gray & Christmas, an outplacement consultancy. The burgeoning recession also meant teens couldn’t rely on their parents to buy extras and pushed the teen chains to double-digit sales declines.

WHAT’S AT STAKE: Market research firm NPD Group Inc. estimates that back-to-school clothing market, for 7-to-17 age group, is about $11 billion. But teen merchants have more at stake. They get about 25 percent of annual sales from the back-to-school season, instead of 10 percent to 15 percent for department stores, according to Kurt Salmon Associates, a retail consultancy.

THE FORECASTS: Michael Niemira, chief economist at The International Council of Shopping Centers, expects that total sales for back-to-school spending for the July through September period should be up 5.4 percent, but that’s on top of a 2.8 percent drop last year. Any gain, however, would the first since 2007.

Others are less optimistic. John Long, retail strategist at Kurt Salmon Associates, projects that clothing stores will see revenue at stores opened at least a year only slightly better than a year ago, when it struggled with declines. The measure is a key indicator of a retailer’s health because it excludes results from stores that open or close during the year.