Saturday | August 01, 2015
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Kona retailers give back-to-school sales mixed grades

Eager children and their parents are not the only ones excited by the back-to-school season.

With summer coming to a close, Kailua-Kona families are hitting the stores and stocking up for a new school year. For retail businesses, according to the National Retail Federation, profits from the back-to-school shopping season are second only to those of the winter holidays.

The back-to-school frenzy is paying dividends for some local retailers, while for others, its outcome remains to be seen.

“Back-to-school is like Christmas in the summertime,” said Roger Thomas, the store team leader at Target in Kailua-Kona. Back-to-school season acts as a rough economic barometer for the summer, Thomas said. This year, the federation’s annual Back-to-School Survey, conducted by Prosper Insights & Analytics, anticipates a slight decrease in back-to-school spending nationally, following last year’s historically high season. Families with school-age children are expected to spend an average of $634, with national back-to-school revenue expected to total $26.7 billion. “(Shoppers) certainly have not let us down so far this year,” Thomas said.

Thomas said it is a challenge for retailers to meet the high demand for school supplies. In Target’s first few years in Kailua-Kona, last-minute shoppers found the store sold out of certain supplies.

“This year, we’re seeing more sales just because we’re staying better in stock,” he said.

Thomas estimated that meeting back-to-school demand, for a store Target’s size, requires a total of about 50 pallets, or two shipment containers, of school supplies alone. The store starts accumulating the merchandise in June, just as school is getting out for the summer. Back-to-school shopping picks up in mid-July after Independence Day, Thomas said, and extends until about the middle of August. “Typically the closer it gets to school starting, the more frantic it gets,” he said. Hiring at Target has been an ongoing process, Thomas added. “You can feel the economy is starting to pick back up.”

Nicole Guillermo, assistant manager at Kailua-Kona’s Jeans Warehouse, said the season thus far has been unusually slow at the women’s clothing store. Maxi skirts, screen T-shirts, and tank tops are very popular, she said, but the store’s sales and promotions have still not attracted as many customers as expected. Some dresses and denim shorts offered at a 40 percent price cut have not sold, Guillermo said.

Yet, she added, the season is only halfway over, and she expects back-to-school business to continue for a few more weeks after school starts. “I’ve noticed a lot of last-minute back to school shopping,” Guillermo said. The Jeans Warehouse Kids branch just a few doors down, which is normally fairly quiet, has been bustling with families and young children, she added.

Apparel and shoes claim the largest proportions of back-to-school spending, according to the federation’s study.

“School supplies are high volume, but there are much lower margins on those items,” Thomas said. For retailers, it is the big-ticket items, such as clothing, electronics, shoes, and backpacks that make back-to-school season the biggest event of the summer.

Malakai Silva, a kindergartner at Holualoa Elementary School, has a sharp eye for this year’s hottest trends. His mother, Maile Silva, pushed a shopping cart through Target’s back-to-school section on Wednesday while Malakai scanned the shelves of backpacks from his perch in the cart. He zeroed in on a pack displaying The Hulk looming out of its back pocket.

Backpacks and lunchboxes are among retailers’ most profitable items, Thomas said. They become even more popular when decorated with themes like the Avengers, Spiderman, Ninja Turtles, and Angry Birds.

The sustainability trend is also impacting the market. Filler paper and other items made from recycled paper are more likely to attract buyers, Thomas said. A visit to Target on Wednesday found the store’s on-shelf supply of recycled filler paper exhausted.

In addition to traditional school supplies, many school lists also require students to contribute hygienic items, such as tissues and hand sanitizer, to their classrooms. Food items for children’s snacks and lunches are also popular. Thomas said goldfish, fruit snacks, and Lunchables are common purchases.

Electronics, especially flash drives and calculators, have a growing role in the back-to-school market, Thomas said. More expensive electronics, such as tablets, computers, and smartphones, are not usually purchased for schoolchildren, but families will often splurge on these items for students returning to college, he said.

The federation’s survey reported that 56 percent of families with school-age children will purchase electronics during the back-to-school season. Yet despite the relatively low proportion of buyers, electronics constitute the second-highest proportion of sales value, behind apparel and accessories.

According to the federation, 95 percent of adults with school-age children will be shopping for apparel and accessories this year, and those shoppers are expected to spend an average of $231 on such items. Last year’s historically high back-to-school and back-to-college spending reflected a rebound from previous years, when the economic downturn caused many families to cut back their school spending budgets, according to the federation. Analysts believe last year’s splurges left families with enough supplies to last another year, causing this year’s slight decrease.

Representatives at K-Mart, Office Max, Oshima Surf & Skate, and Kona Coast Office Supply could not be reached as of press time.

To view more results from the federation’s study, go to nrf.com/backtoschool.