NEW YORK, July 21, 2008 — Higher gas and food prices will cause a significant number of consumers to spend less this back-to-school shopping season and will also cause consumers to change where and how they shop, according to a new survey from Deloitte.

Due to these economic concerns, 71 percent of survey respondents said they plan to spend less on back-to-school items this year. Almost half (48 percent) plan to reduce their household spending by more than $100.

“Consumers have been pessimistic for several months, primarily because of the strains on their budgets from higher gas and food prices,” said Stacy Janiak, Deloitte’s U.S. Retail leader. “These survey results indicate that consumers will likely stick to the basics this fall, and parents may be saying ‘no’ more often as they head to the register. Retailers should focus on areas that will contribute to profitable growth, such as adapting their merchandising and promotional activities to increase loyalty among existing customers and attract new customers.”

The survey results indicate that this year the vast majority of consumers (88 percent) will do their back-to-school shopping at discount/value department stores. Almost four in 10 (37 percent) will shop at dollar stores, and almost one-third (32 percent) will shop at office supply/computer stores.

In addition, most respondents (90 percent) said they will likely change the way they shop for back-to-school items this year. Changes included:

• 79 percent will buy more back-to-school items on sale
• 70 percent will buy only what the family needs 
• 68 percent will buy more lower-priced items
• 53 percent will use more store coupons
• 46 percent will shop at different — less expensive — stores than usual
• 45 percent will put off buying certain items for as long as possible
• 33 percent will buy more private label
• 27 percent will research more products online, to find the best price

“As consumers look for deals and value, discount stores are clearly well-positioned,” said Janiak. “Dollar stores have an opportunity to enhance their market share and positioning by getting the word out about their back-to-school selections. There is also an opportunity for stores with private label lines, charge cards or loyalty programs to offer new and unique value propositions to customers, which can help pull consumers into the stores and keep them shopping.”

While consumers will continue to buy supplies, such as paper, pencils and notebooks (95 percent), clothes (92 percent), shoes (86 percent) and backpacks/book bags (68 percent), as well as other merchandise categories, many indicated that they intend to cut back on these purchases. Notably, more than eight in 10 (83 percent) survey respondents said they will spend less on clothes, while 48 percent said they will spend less on shoes and 30 percent said they will spend less on backpacks/book bags. Almost one-third (29 percent) said they will spend less on supplies.

More than four in 10 (41 percent) survey respondents said they will seek out “green” products this back-to-school season, and more than three in 10 (31 percent) said they will seek out green retailers. Said Janiak, “The green issue has captured the consumer’s attention, but the jury is still out on how much intention will translate into action. In this environment, retailers should take advantage of any marketing opportunity.” 

For more information about Deloitte’s Retail sector, please visit www.deloitte.com/us/retail.

About the survey
The survey was commissioned by Deloitte and conducted online by an independent research company between July 11 and July 14, 2008.  The survey polled a sample of 5,035 consumers and has a margin of error for the entire sample of plus or minus one percentage point.

About Deloitte
As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.