Back-to-School Shopping to Fall? Stocks to Win\/Lose

The back-to-school season is a much-awaited time for students and retailers. However, this year, inflation is likely to weigh on consumer behavior. Deloitte’s recent survey indicated a downward trend in back-to-school spending, with parents planning to spend 10% less (i.e., $597) per child compared to the previous year, as quoted on Yahoo Finance. In fact, back-to-school spending is likely to record the first decline in nine years due to inflation.

Let’s delve deeper into the facts.

Impact of Inflation on Back-to-School Spending

Reduced disposable income, thanks to rising inflation, will act as the primary reason behind the decline in back-to-school spending. With inflationary pressures pushing up the cost of essentials like gas, food and rent, families are feeling the pinch.

As a result, parents are prioritizing the necessities of their children and becoming more selective before using savings over buying goods. Clothing and technology are likely to be the most affected categories, with an expected a decline of 14% and 13%, respectively.

Strategies to Cash in on the Back-to-School Shopping Trend

Wise Budgeting May Benefit Stores Offering Good Deals

Consumers are expected to allocate a higher portion of their budget to school supplies, as the segment is expected to see a 20% increase in spending this year. Parents may look for deals and promotions to stretch their budget further.

Target (TGT) and Five Below (FIVE) are some stocks that may gain from this budgeting trend. Normally, Five Below offers great deals on school supplies while one can find everything (be it dresses, lunch boxes, bottles and bags) a kid needs for school in Target at value pricing.

Shopping at Thrift Stores to Rule?

One may consider exploring secondhand stores that sell used products at lower prices. Notably, thrift store operator Savers Value Village (SVV) amassed a market capitalization of nearly $4 billion in a strong debut on the New York Stock Exchange in June.

The TJX Companies TJX, which owns popular thrift store chains such as T.J.Maxx and Marshalls, should also catch investors’ eye as these companies offer discounted merchandise that are sheer necessities of students.

Will Gadget & Clothing Sales Decline?

With tablets, smartphones and laptops likely to see a sales decline this year in students’ circle, Best Buy BBY may not make the most of the 2023 back-to-school season. It is a multinational specialty retailer of consumer electronics and home office products. Foot Locker FL is a company that also might see a fall in sales this year due to less projected spending on apparel and accessories.

Comparison Shopping to Boost Online Stocks & ETFs?

With prices changing due to inflation, it’s important to compare prices across different platforms. Online platforms and mobile apps normally emerge as offering the best deals and discounts. And when it comes to online shopping, who can forget AMZN? ProShares Online Retail ETF ONLN also appears to be a great pick.

Loyalty Programs & Cashback to Boost Fintech Companies

Consumers would like to take advantage of loyalty programs or cashback offers in order to ward off the evil impacts of inflation. Hence, their payment mode could be digital payment services or credit cards. PayPal Holdings, Inc. PYPL, which is known for its digital payment services, offers a cashback program through its PayPal Cashback Mastercard.

Square Inc. SQ is a financial services and mobile payment company that provides the Cash App. The application offers a cashback feature. In all such transactions, Visa V and Mastercard MA are likely to surge in transactions and sales., Inc. (AMZN): Free Stock Analysis Report

Mastercard Incorporated (MA): Free Stock Analysis Report

Visa Inc. (V): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

The TJX Companies, Inc. (TJX): Free Stock Analysis Report

Best Buy Co., Inc. (BBY): Free Stock Analysis Report

Foot Locker, Inc. (FL): Free Stock Analysis Report

Five Below, Inc. (FIVE): Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report

Block, Inc. (SQ): Free Stock Analysis Report

ProShares Online Retail ETF (ONLN): ETF Research Reports

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