Back-to-school shopping season gives retailers a temporary boost in in-store traffic

Back-to-school shopping is essentially non-negotiable for many households, so when you’re buying your kids the coolest clothing and splurging on the 64-pack of crayons, know those decisions might be having a significant impact on stores.

The back-to-school shopping season is bringing higher foot traffic to stores across the board, particularly in the apparel category, after previous retail holidays this summer had little effect, according to foot traffic data from Placer.ai, but data still shows that shoppers are still cautious with their spending and the lift could only be temporary.

After seeing a slowdown earlier in Q2, visits to apparel chains have increased and consistently exceeded 2022 levels since mid-May, per Placer.ai. This bump is even more pronounced when looking at off-price and children’s clothing retailers.

• For the week starting June 19, children’s clothing chains saw a 21.7% YoY bump in visits compared to a 5.4% decline during the week of May 29. That increase has continued through mid-July, when children’s clothing stores still saw an 11.9% YoY spike.
• During the week of June 19, off price saw a 16.7% jump, its largest for the year to date. And as of July 10, off-pricers are still holding strong at a 12.6% YoY increase.

“[Off price is] one of those segments where, in a difficult economic environment, they can really move the needle on it in a powerful way,” Ethan Chernofsky, SVP of marketing at Placer.ai, told Retail Brew. “Across the board, even ones where we see minor visit declines, it’s usually because the visits were so high last year. [It’s] a really well-run, focused retail segment that has benefited from trend alignment as well.”

A mixed bag: The back-to-school bump has even lifted major big-box chains, after major retail holidays this summer, including Memorial Day and Prime Day, were disappointing in terms of foot traffic (with the exception of July 4), per Placer.ai. Additionally, foot traffic during the Prime Day shopping season, which was the week of July 10, was weaker on a YoY basis.

• For example, visits to Walmart the week of June 19 were slightly up at 2.6%—better than the 3.5% decline the week prior—but eventually came down during the week of Prime Day to a 0.8% YoY increase.
• Costco saw its highest foot-traffic bump (11.9%) the week of July 3, but that came down to Earth the following week at a modest 4.7% YoY jump. Then again, it’s better than the 0.6% decline the week of May 22, ahead of Memorial Day.

“There have been economic challenges for the consumer. Different groups are impacted differently, and we will likely see different rates of recovery for those segments as a result,” Chernofsky said. “So it’s being aware that even as things start to improve, for those who the impact was the lightest, the recovery will be the smoothest.”

The big picture: Chernofsky said it’s still hard to tell if this back-to-school shopping season will be exceptional or in line with what’s expected given current economic conditions. He added that consumers might still be holding back a little given the ongoing uncertainty, but there are positive signs.

“The fact that literally up until two months ago, the prime word we were using was recession, whether it’s real or not, when it gets discussed, it has an impact on consumer sentiment,” he said. “So the fact that we’re seeing this kind of [bump]—we might be bouncing back and that’s a very positive place to be.”