Retailers Weigh Concerns About Back-to-School Sales

Delta Variant Could Impact Shopping Habits

The back-to-school shopping season was expected to be one for the record books this year, as pent-up demand and stimulus checks drove sales of school supplies, clothes, and other items. However, the Delta variant of COVID-19 could change that for stores this fall. Shoppers in the US are growing wary of trying on clothes in stores, while others are beginning to spend less in case another COVID-19 surge negatively impacts the economy.

That sentiment could hurt sales at retailers including Target (TGT), Walmart (WMT), and Bed Bath & Beyond (BBBY). Retailers are facing tough comparisons in the third quarter thanks to strong demand last year. They need a big back-to-school period to meet rosy forecasts.

Consumers Cut Back Spending

Bed Bath & Beyond spoke about these trends last week, saying some customers are putting off back-to-school purchases. August tends to be the biggest back-to-school shopping month, but some families are waiting to do their shopping this year due to uncertainty about the school year.

The CDC changed its mask policy recently, calling on vaccinated people to wear masks indoors to slow the spread of the contagious Delta variant. This is causing some consumers to rethink their habits surrounding travel, entertainment, and shopping. A recent survey found that 56% of consumers said they were cutting back retail spending due to concerns about COVID-19, both from a health standpoint and a financial stability perspective.

Limited Choices Could Hurt Sales

In addition to the Delta variant, which is spreading rapidly among the unvaccinated, retailers are still contending with supply-chain issues and shipping disruptions related to the pandemic. These challenges could limit the amount of choices available to shoppers, which could also hurt retailers’ bottom lines.

Additionally, some retailers planned conservatively for the season, fearing they would be stuck with excess inventory. This could also cause issues if demand is higher than expected. After all, many retailers made their product and inventory decisions for the back-to-school season as much as nine months ago when vaccines were not available.

The back-to-school shopping season is an important one for the nation’s retailers. With the Delta variant of COVID-19 spreading rapidly, red-hot growth forecasts may need to be tempered.

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