Back to School Sales Dip, But Not As Much as Projected

The big debate around schools has been whether or not they should be open to in-person learning, and that debate continues to rage as some geographies are in a good position to do so while others, due to issues like a high community COVID-19 infection rate, older buildings with subpar ventilation systems and good old fashioned overcrowding are struggling to find a way to conduct classes. 

Regardless of whether the student is learning remotely or from a physical school, supplies are needed. Paper, pens, craft supplies, computers and other devices are necessary, and suppliers of said goods are reaping the rewards of this, even in the face of a tanking economy and a lack of clarity of how the whole of the school year will play out. 

A report by consumer data analytics company Placer.ai argues that while sales and foot traffic are down year-over-year for most major school supply retainers such as Office Max, Best Buy, Target and Walmart, things could be a lot worse and recent weeks show an influx of store visits. 

Some stores have been hit harder than others, with the weekly visits for Office Max, Staples and Office Depot down around 30% each YoY for the week of August 10. Others, such as Best Buy and Target, saw a dip of less than 7% for that same week. 

What is good news all around for retailers is the weekly progression of store visits since the week of July 13. Office Depot, Staples and Best Buy all saw significant increases week to week leading up to August 3, where Office Depot and Office Max peaked before seeing a slight decline for the week of August 10. Staples continued to see growth the entire way through, peaking at 19.8% growth through August 10, the last date examined in the report. 

Walmart and Target, perhaps because of their wider offerings outside of school and office supplies, didn’t see as much of an increase as the other stores during the weekly periods examined, but they also didn’t see as much of a drop as the others that depend much more on the basics of school and office supply. 

This theory was buttressed by a the report’s note that in-store time at Walmart, which arguably has the most varied product offering of any of the retailers listed above, was actually up 4.5% YoY, indicating that shoppers were looking to get more of their needs from a singular location. 

This does potentially come at the expense of places like Office Depot, which the report argues benefit from consumers making multiple trips to obtain supplies. 

The report also suggests that increased dependence on the home office might be able to temper some of the large swings that occur for office and school supply retailers each year, ballooning during the weeks leading up to school openings and drying up after.