Jun 9, 2009

Back-to-School Shopping To Test Retail ResilienceBy Jessica WohlReuters.com

Chicago – As students study for final exams, the retail industry is gearing up for its biggest test so far this year — the back-to-school shopping season.

After cutting costs to cope with slack consumer demand during the recession, retailers hope the economy will start to recover in the second half of the year.

The back-to-school season, which begins in July, will be the first big chance for investors to see if retailers can lure in U.S. shoppers that have a laser-like focus on value. Sales of apparel and school supplies could serve as an early indicator of whether the economy will start to rebound later this year, as many economists expect.

“I’m not arguing that business is going to be positive,” said B. Riley retail analyst Jeff Van Sinderen. “I’m arguing the declines will start to moderate, that’s what we’d like to see happen. If business is up, I’d be surprised.”

Back-to-school spending is second only to the winter holidays in the United States. Last year, Americans spent $54.1 billion on apparel, shoes, electronics and other items for school kids and those heading back to college, according to the National Retail Federation.

This year marks the first time parents stock up on school gear since the financial crisis dug in its claws last September.

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