College spending could boost retail sales

Over the past few years, Alicia Browne has noticed a change in what college students haul out of cars on move-in days at the University of Alabama.

Along with pillows, comforters and laptops, more students arrive with mini fridges, headboards, Keurig coffeemakers and even air purifiers. Some hire decorators who drop off linens, custom-made curtains and other furniture or decor orders on a specific vendor delivery day that the university created.

“It [dorm spending] has grown over the last decade – but since Covid, I think it has really exploded,” said Browne, the university’s director of housing administration for about 13 years.

The back-to-college spending bump could be one of the biggest sales opportunities for retailers this fall. College students and their families are expected to shell out a record amount this year: an average of about $1,367 per person, according to an annual survey conducted this summer by the National Retail Federation and market researcher Prosper Insights & Analytics. That figure has shot up by about 40% since 2019, according to the survey.

Back-to-college spending is expected to add up to $94 billion in total this year — an approximately 70% jump from the $55 billion in expected spending in 2019.

Browne chalks up the rising spending to the influence of TikTok videos and other social media posts that show off fancy dorms. She said some parents also want to splurge on children who lost years of milestones and typical socialization during the pandemic.

“There’s a definite sense from parents and families that their students missed out on things because of Covid, that there’s a need to perhaps help make up for missed experiences,” Browne said. “I do think part of that is trying to ensure their student is as comfortable as possible, as successful, that their start to school is going to be the best it possibly can be. And that involves their living situation and families are willing to pay for it.”

The back-to-college boom also creates a chance for retailers to attract and create ties to a new generation of younger shoppers.

“You’re establishing a relationship at a very important and vulnerable age,” said Marshal Cohen, chief retail industry advisor for Circana, a market researcher formally known as IRI and The NPD Group. “A strong retailer will retain that relationship over time.”

This year, that spending and those closer ties could especially help companies like Target, Walmart, Kohl’s and others that have said more frugal shoppers are buying fewer big-ticket or discretionary items like clothing, electronics and furniture. Those retailers will likely share some early insights about sales trends when they report earnings in the next couple of weeks.

Yet the back-to-college sales alone may not overcome retailers’ other challenges. Many companies, including Best Buy and Macy’s,…