Canadians face soaring prices as back-to-school shopping season returns

Ceilidh Fear is typically a bargain shopper.

But the mother of two is planning to splurge a little on a back-to-school shopping trip.

“It’s the one time of year other than Christmas that I do believe in buying them brand new outfits,” said the Victoria, B.C.-based mom of kids aged nine and 11. “Otherwise I typically shop at second-hand stores like Poshmark.”

The back-to-school shopping season has arrived as inflation continues to push up prices and squeeze consumer budgets.

Yet retail experts say families are expected to prioritize spending on the upcoming school year because school supplies are considered an essential category for many shoppers.

Excitement is also building for the return of a more normal, pre-pandemic back-to-school year. Most mask mandates have been lifted across Canada for what could be the first fully in-person school year in three years for some students.

“We expect to see lots of in-store shopping with the return of a fun tradition of a family trip to stock up on fashion and school supplies,” said Retail Council of Canada spokeswoman Michelle Wasylyshen.

A new survey by the group found more than 85 per cent of Canadians make back-to-school purchases, with apparel the top spending category followed by books and electronics.

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The poll conducted by Caddle found 77 per cent of back-to-school shoppers will spend more than $50, with consumers spending the most at big box retailers followed by clothing retailers.

Shoppers are taking whatever steps they can to save on back-to-school shopping this year, said Matthew Shay, president and CEO of the U.S.-based National Retail Federation, which often sees similar shopping trends as Canada.

“(They are) cutting back on discretionary spending, shopping sales and buying store- or off-brand items in order to purchase what they need for the upcoming school year,” he said.

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The increasing price-sensitivity of shoppers is expected to spur retailers to offer discounts and sales to attract consumers.

“Parents are going to be frugal and looking for deals,” retail analyst Bruce Winder said. “You’re going to see consumers shop around a lot.”

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For her nine-year-old daughter Tenley, who is going into Grade 4, Ceilidh Fear said she just needs to provide the school with $40 for school supplies.

But back-to-school shopping for her 11-year-old son Preston, entering Grade 6, is proving much more complicated.

“I don’t actually have to worry about school supplies for my daughter but for my son we were given a supply list and we have to go out and shop,” she said.

Through bargain-hunting, they were able to pick up Duo-Tangs and coil-bound notebooks at Staples for 25 cents each.

“For $4.90 plus tax I got all the Duo-Tangs and notebooks he needed,” Fear said. Now she’s keeping a close eye on flyers to find good deals for the rest of the supplies.

“I’m typically a bargain shopper so I try not to pay full price,” Fear said. “I’ll stop at a store to check out the sales on my way home from work but I try not to make any additional trips because gas is insane right now.”

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Big box stores often lure shoppers with something the retail industry calls a loss leader, where a product is sold at or below its market cost.

“A store will take a high-profile item and set the price very low,” Winder said. “It attracts shoppers and sets a price perception for the store.”

Yet even with discounts on key items, back-to-school bills are expected to be more expensive this year, Winder said.

“Retailers have already increased prices quite a bit to offset some of the input costs,” he said. “Discounts will be on a regular price that’s already higher than pre-pandemic.”

Higher prices are prompting shoppers to opt for lower-cost retailers and “trade down” for cheaper options.

“Canadians are going to be turning to lower cost retailers and lower cost options and looking for those sales,” said Jenna Jacobson, assistant professor at The Ted Rogers School of Management at Toronto Metropolitan University.

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Roughly 30 per cent of retailers are heavily affected by back-to-school shopping sales, according to the retail council.

“In the retail calendar, back-to-school is an important time with significant sales for many stores,” said Ramesh Venkat, director of the David Sobey Centre for Innovation in Retailing and Services at Saint Mary’s University in Halifax.

Some stores are hoping back-to-school will help clear excess inventory as skyrocketing prices slow consumer spending and leave in-stock merchandise levels higher than usual.

“Particularly on the apparel side, we can expect to see some big discounts,” Winder said. “They’ve got to make sure they clear the inventory because they don’t want to hold it for another year.”

Meanwhile, the season often serves as an early indicator of what to expect for the holidays.

“Some retailers really do use back-to-school as a way of building momentum heading into the holiday season,” said Leslie Lee, senior vice-president of marketing for digital advertising firm Vistar Media.

The return to in-person schooling this year appears to have ramped up back-to-school advertising campaigns, she said.

“We definitely saw a decline in back-to-school promotions for the past two years,” she said. “Now those campaigns and the messaging now is more focused on deals and price savings rather than general lifestyle.”

Tamara Szames, Canadian retail industry adviser with The NPD Group, said consumers feeling pinched by inflation will likely focus on key back-to-school supplies.

“Consumers are really cautious right now and will be looking for promotions and focusing on essentials,” she said.