Back-to-school sales poised to fall for first time in years

NEW YORK -- Even teens, a traditionally recession-proof group, aren't expected to rescue the retail industry's second-biggest selling period: back to school.

After at least five years of increases, back-to-school sales, including those for college students, are expected to drop this year, with the National Retail Federation pegging the figure down 7.5 percent to $47.5 billion.

With the economy still struggling and the unemployment rate at 9.5 percent, four out of five Americans have changed their back-to-school plans this year, a survey from the Washington trade group shows. Although 56.2 percent of shoppers said they are hunting for sales more often, about half of them said they plan to spend less overall.

The back-to-school period is a key indicator of consumer demand, coming before retailers' most crucial season -- the holidays, analysts say. Teens traditionally have held up well, but they've not been immune from the job losses that hurt their parents, analysts said.

Back to school is "likely a harbinger of another difficult holiday shopping season," said Ken Perkins of Retail Metrics.

Teen-apparel retailers, except for Aeropostale Inc. and Buckle Inc., were among the worst hit in June, with the group's same-store sales declining 10 percent, the worst performer compared with other industry segments, according to RetailMetrics.

Sales at Abercrombie & Fitch Co. stores open at least a year, hurt by the chain's higher prices compared with those of most other rivals, declined 32 percent in June, which was worse than expected. Rival American Eagle Outfitters Inc.'s sales fell 11 percent. Aeropostale, benefiting from its lower prices and improved merchandise, saw its sales rise 12 percent.

About two-fifths of shoppers said they plan to buy more store-brand and generic products -- which usually are cheaper -- and to use more coupons, the NRF survey showed.

Most product categories are expected to see declines, but electronics is the one bright spot. It's poised for an 11 percent gain as prices for laptop and desktop computers have decreased, the NRF survey showed.

"As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shopping this year," said Tracy Mullin, president and chief executive of the NRF.

The average family with kids in grades kindergarten through 12 is expected to cut its spending by 7.7 percent to $548.72, with total spending for that group expected to decline 13 percent to $17.4 billion.