This year’s Back-to-School retail performance was hampered by ongoing inflation and falling consumer confidence. Still, despite the challenges, foot traffic numbers indicate that some shoppers did come out ahead of the new school year. So how did key brands and categories perform? And what might Back-to-School Season tell us about the upcoming holiday season? We dove into the data to find out.
Back to School Drives Visits During Challenging Retail Period
The retail space has faced its fair share of challenges in recent months as consumer spending slowed in the face of the still-high prices. But weekly visits to major retail categories indicate that Back to School still drove foot traffic to stores across the country.
Between mid-July and mid-August, visit growth to key retail categories exceeded the overall retail visit average when compared to a May 1st through 7th, 2023 weekly baseline. In fact, during the week of July 31st, visits to superstores, clothing chains, and shopping centers were the highest they had been since the beginning of May – including the week of Mother’s Day. And visits to department stores nearly reached their Mother’s Day peak.
The baseline change in visits graph below also highlights the different functions played by various retail categories during the Back-to-School season. While visits to superstores, clothing chains, and shopping centers peaked between July 31st and August 6th, visits to superstores peaked two weeks later, during the week of August 14th. This may indicate that consumers visit apparel retailers earlier in the season – when they can take their time finding the perfect size and style – while waiting for the end of the Back to School window to buy backpacks and school supplies.
Year-over-year data Highlights Challenges
Although Back to School did drive a visit boost to several categories relative to May and June, year-over-year (YoY) data highlights this season’s challenges. With the exception of the clothing category, weekly visits to the major Back to School categories were mostly down relative to 2022 as consumers prioritized necessities in the face of continued high prices. Yet despite the setbacks, some brands managed to shine.
Costco Leads the Superstore Category during Back to School 2023
Costco – which caters to a higher-income audience than Walmart or Target – saw a consistent YoY increase in weekly visits. Meanwhile, YoY visits to Walmart and Target rose slightly from late June to early July before dipping again around mid-July. Still, the data indicates that the two brands did receive a Back to School lift – the visit gaps for both Walmart and Target were smaller from mid-July to mid-August than they were between May and mid-June.
Off-Price Remains On Top
Leading off-price retailers have expanded in recent years, and thrift stores have also grown in popularity. Meanwhile, most major department stores rightsized – and with fewer venues comes a smaller share of the overall apparel visit pie.
Looking at the change in visit share distribution between off-price retailers, major thrift store chains, and department stores during the Back to School seasons of the past six years illustrates the shift that has taken place within the apparel category. In July and August 2018, department stores, off-price retailers, and major thrift store chains enjoyed 40.1%, 49.2%, and 10.7% of the visit share, respectively. But by 2023, department stores’ visit share dropped to 28.4%, while off-price retailers and major thrift store chains increased their part of the pie to 58.1% and 13.5%, respectively.
The steady growth in visit share for the off-price and thrift store segments reveal the shift in apparel consumers’ shopping decisions and the increasingly central role played by value and price – even before the current economic challenges.
Back to College Boosts Value-Priced Furniture Chains
Highschoolers and parents of schoolchildren aren’t the only ones shopping for supplies in July and August – college-bound students and their families also head to the stores to pick out dorm furniture and other essentials. And foot traffic data shows that, here too, value-priced chains are coming out on top.
The home furnishings category as a whole saw an uptick in visits between mid-June and mid-July, when a brief window of economic optimism may have driven some shoppers to make the large purchase they had been putting off. But visits to the category fell again in August as consumer sentiment dipped once more. Meanwhile, visits to value-priced home furnishing chains, including American Freight, HomeGoods, and At Home stayed consistently above 2022 levels for most of July and August – indicating that price is still at the top of consumers’ mind in the home furnishings space as well.
Staples Still Driving Back to School Visits
Last but not least, Staples also seems to remain a Back-to-School fixture, with week-over-week (WoW) visits consistently up in July and August – meaning that the chain’s stores got increasingly busy as the Back-to-School season escalated. And although Staples YoY visits were down during much of the period, as some consumers likely visited lower-priced alternatives for Back-to-School supplies – YoY visits were up for much of May and June, indicating that it’s still too early to write off the chain.
What Can Back to School 2023 Tell Us About the Upcoming Holiday Season?
Back to School 2023 was relatively muted as many consumers continued choosing value-priced options over more traditional retailers. At the same time, chains that catered specifically to higher-income shoppers – such as Costco’s – also saw strong visit numbers, as this audience segment has likely been less impacted by the ongoing inflation. Should current trends continue, the upcoming holiday season may bring more of the trends seen all year, with value-priced retailers and chains catering to more affluent shoppers thriving while mid-range chains hunker down until the economic headwinds blow over.
For more data-driven retail insights, visit placer.ai/blog.
