The upcoming back-to-school shopping period is anticipated to see only modest growth, primarily influenced by higher pricing rather than increased unit sales, according to a recent Circana report released on Friday.
Spending Patterns and Sales Figures
The Circana report indicates a slight downturn in retail performance, with a 1% decrease in overall retail sales revenue year-over-year for July. Unit sales experienced a 2% reduction. More specifically, discretionary general merchandise retail dollar sales fell by 4.3% for the four-week period ending August 1, while unit demand declined by 3.9%. These trends illustrate a cautious approach among shoppers regarding discretionary spending, with higher-income consumers driving spending growth.
Impact of Economic Pressures
Back-to-school shopping appears to reflect broader economic challenges faced by U.S. consumers. According to Kiara Barrett, Global Head of Thought Leadership at Circana, consumer spending is increasingly focused on necessity rather than promotion-driven expansion. Although promotional activities play a role, widespread discounts are less effective in stimulating additional demand.
Consumer Priorities for School Shopping
Data from Circana in July suggests that while essentials such as school supplies and technology are prioritised for the first day of school, apparel purchases are expected to be spread across the year. Consequently, a decline of 1% to 2% in kids’ apparel dollar sales is projected for the third quarter, driven by a dip in unit demand.
Financial Stress and Buy Now, Pay Later Options
Omnisend statistics from last month reveal that about 40% of parents anticipate greater financial stress this back-to-school shopping season compared to 2025. Approximately 45% of U.S. households plan to use buy now, pay later financing for school-related purchases, marking an increase from 39% the previous year.
Record Spending on K-12 Education
Despite these challenges, spending on K-12 students is projected to reach a record $43.3 billion this year, surpassing the $39.4 billion recorded in 2025, according to findings from the National Retail Federation and Prosper Insights & Analytics.
Reporting based on coverage first published by retaildive.com.