Pent-Up Demand to Fuel Back-to-School Shopping

Retailers Prepare for Strong Back-to-School Sales

The pandemic-fueled shopping surge is expected to spill over to the back-to-school season, with Amazon (AMZN), Walmart (WMT), Target (TGT) and other retailers poised to benefit. The shopping season usually kicks off in mid-July and lasts through August.

Back-to-school shopping has traditionally been a big sales driver for retailers as families purchase clothes, electronics, college dorm décor, and school supplies. This year is expected to be even stronger given pandemic shutdowns kept many students at home. Now with life returning to normal they are ready to spend again. US spending for back-to-school gear and supplies is projected to increase 5.5% year-over-year and increase 6.7% when compared to 2019.

Amazon, Walmart, Target to Benefit

A better-than-expected back-to-school shopping season will be welcomed by the online and offline retailers. Amazon, Walmart, and Target will face tough baseline comparisons with 2020, when sales of groceries and other pandemic essentials skyrocketed. Meanwhile Macy’s (M) and Kohl’s (KSS) were hit hard during the pandemic and need the boost a stronger back-to-school shopping season may bring.

Apparel sales are expected to be among the big drivers of growth as consumers swap their loungewear for new shoes and attire. Some forecasts have apparel sales growing nearly 80% year-over-year and 11% compared to 2019. Department stores should be a big beneficiary of that trend as consumers hit malls again.

Ecommerce Still Driving Growth

Ecommerce sales will still be part of the picture but are expected to decline around 7% from this time last year. With that said, they’re projected to increase more than 50% compared to 2019. That underscores the comfort level consumers now have shopping online. The back-to-school shopping season doesn’t kick off for a few more weeks, but Amazon’s Prime Day on June 21 and 22 could jumpstart sales. Walmart and Target are also running summer sales that overlap with Prime Day.

Retailers are benefiting from more than a year’s worth of pent-up demand which bodes well for their bottom lines. The big question for investors in the near term is, will it be enough for some of them to overcome tough year-over-year sales comparisons?

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21061402