Chains sharpen prices for dulled BTS shopping

It’s no surprise that in the current economy, the back-to-school selling season is looking bleak. Consumers will be spending less and are likely to spread purchases over time rather than buying in a rush in the weeks leading up to the start of the school year.

The National Retail Federation’s 2009 Back to School Consumer Intensions and Actions Survey, conducted by BIGresearch, found that the average consumer will spend $98.44 on such school supplies as notebooks, folders and backpacks. The survey also revealed that 4-out-of-5 Americans have made changes in back-to-school plans this year as a result of the economy. Nearly half plan to spend less overall, 56% plan to do more comparative shopping with ad circulars and newspapers, 42% plan to buy more store-brand or generic products, and 40% plan to use coupons.

“Consumers will first and foremost think of price. Whether that means private label or searching for coupons, consumers will be holding on to their purse strings tightly,” said Kathy Grannis, spokeswoman for the National Retail Federation.

Sales of private-label writing instruments, for example, represent a significant part of that category. Private-label pens accounted for 19% of category dollar sales and grabbed nearly 11% of category dollar sales at food, drug and mass outlets excluding Wal-Mart for the 52 weeks ended July 12, 2009, according to Information Resources Inc.

Manufacturers have been aggressive with coupons and other promotions in an effort to keep consumers interested in branded products. “Coupon redemption rates are expected to increase in this economic environment,” said Joseph Franzino, brand manager of stationery for BIC Consumer Products USA.”BIC has foreseen this trend and is supporting the business with online coupons, as well as a national FSI that will reach 40 million households on Aug. 9.”

NRF’s survey found that drug stores are likely to see a spike in the number of consumers planning to shop the channel for school items. According to the survey nearly a quarter of families will shop drug stores for BTS, an 18% increase over last year’s 18.2%. “Drug stores have become more popular recently as their merchandise mix has broadened,” the report said.

The drug channel was ready. Chains have been sharpening their prices and stocking plenty of value-priced private-label product to appeal to thrifty consumers. CVS, for example, offered 30% off school supplies through Aug. 7. Private-label five-subject notebooks were advertised for $3.35, a price break from the original $4.79 pricing. In July, CVS promoted some BTS items for 99 cents. Those items qualified for a 99-cent instant Extra Bucks rebate so that the items were free after rebate.

Walgreens ran a buy-one-get-two-free promotion on private-label two-pocket folders, one-subject notebooks, composition books and filler paper in mid-July. Such branded products as Crayola crayons and Sharpie markers were included in a three-for-$1.99 promotion. The circular also included a $3-off coupon on backpacks.

Even in a price-conscious market, chains found room to offer a dash of fashion merchandise. “As long as the consumer isn’t expected to pay for a premium for fashion, there is certainly room for fashion products in this economy,” BIC’s Franzino said. While basic stationery items were expected to be most popular this year, Franzino said BIC’s line of fashionable and colorful mechanical pencils are perennial hits.

Mead and Five Star offered retailers a mix of licensed and nonlicensed fashion at a variety of price points. “This year, consumers are carefully looking at the price/value ratio — not just what’s the cheapest, but what’s the best buy in terms of quality, price and durability,” said a Mead representative. “Knowing that the BTS season would be a challenge for many consumers economically, we tried to focus on providing the retailers with a wide range of variety in order to meet all levels of consumer need and budget levels.”

Kmart, Target and Walgreens stocked Carolina Pad’s Sasquatch line of school and office products composed mostly of recycled materials. The brand’s notebooks have 100% recycled covers and interior page. Notebook covers feature interactive challenges and games, as well as direct users to a Web site where kids can learn more about being green.

CVS carried fashion notebooks from Carolina Pad, as well as “High School Musical” licensed backpacks. “Transformers” and Jonas Brothers were also popular licenses for the 2009 school season.