Chains sharpen prices for dulled BTS shopping

9/14/2009

It’s no surprise that in the current economy, the back-to-school selling season looked bleak. Going into the heart of the season, consumers planned to spend less and 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, projected that the average consumer would spend $98.44 on such school supplies as notebooks, folders and backpacks. The survey 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 planned to spend less overall, 56% planned to do more comparative shopping with ad circulars and newspapers, 42% planned to buy more store-brand or generic products and 40% planned to use coupons.

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,” Joseph Franzino, brand manager of stationery for BIC Consumer Products USA, told Drug Store News in an interview this summer. “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 predicted that drug stores were likely to see a spike in the number of consumers shopping the channel for school items. According to the survey, nearly a quarter of families planned to 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. And they got out early. CVS, for example, offered 30% off school supplies through Aug. 7. 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 3-for-$1.99 promotion. The circular also included a $3-off coupon on backpacks.

However, 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 a premium for fashion, there is certainly room for fashion products in this economy,” BIC’s Franzino said.

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 pages.

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