11 Aug 2011

Back-to-school spending expected to underwhelm

As Canadian parents and students prepare for back-to-school shopping, a new report from the accountancy firm Ernst and Young says retailers likely won’t see profits rise in what is typically a busy time for them.

“Back to school is the second most important season on the retail calendar,” said Daneil Baer, who heads Ernst and Young’s retail and wholesale industry division. “Although lower than their peak levels, higher gas and grocery bills have reduced consumers’ disposal income, as inflation continues to outpace salary increases.”

Another reason why sales will likely be lower this year, according to the source, has to do with higher commodity prices for materials like cotton.

Despite the anticipated slowdown in back-to-school purchases, the firm says losses won’t be significant, as parents typically consider these types of purchases as needs rather than wants.

The report further states that school supplies are expected to be among the buys taking precedence. Portable storage containers may want to be purchased in addition to these items to help increase students’ organization. 

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