Back-to-School Sales Creep Forward

By KAREN TALLEY

Summer is barely here and it's already time to think about back-to-school—shopping, that is.

Young people wearing flip flops and bright cutoffs and tops are starting to be met in the mall by more somber colors and longer pants, a signal that back-to-school sales pitches are beginning earlier than ever.

After Black Friday and Cyber Monday, back-to-school "is the No. 3 seasonal occasion our customers shop us," said Paul Okimoto, vice president of marketing at RadioShack Corp.

David Vogin

This week, RadioShack will start some back-to-school advertising—"sooner than in prior years, because we know consumers are starting to think about their electronics purchases long before returning to campus," Mr. Okimoto said.

The early push on back-to-school reflects the continuing challenges for many retailers in the current lackluster economy. On Thursday, retailers will release their June sales figures for stores open more than a year. The 20 retailers that report are expected by Thomson Reuters to show 1.2% growth, hurt by strong comparisons from last year and signs of economic duress.

The early arrival of fall merchandise, an annual rite as retailers try to outgun each other, is still a bit jarring to some shoppers. "I wish they'd wait a scooch more," said Pamela Cappello of Hicksville, N.Y. "We haven't even been on our summer vacation yet."

At a Macy's Inc. one recent morning, full-price navy blue Levis and brown and beige T-shirts were lining the main aisle, more in keeping with fall looks. Nearby, tanks and white pants were going for 40% off.

Target Corp. had up to 70% off sleeveless shirts and shorts, while a manager said the retailer began putting out back-to-school merchandise a week or two ago, and would likely be finished by the end of this week.

Along with apparel and pens and pencils, consumer electronics play a major role in back-to-school buying,. The older the student, the more gear is purchased, like personal computers and smartphones. Younger students are also increasingly using technology in their classwork, making the consumer electronics piece of the back-to-school pie even bigger.

RadioShack this year will be focusing on college students because they are a more profitable audience and RadioShack's products skew to this group, Mr. Okimoto said. In addition to smartphones, RadioShack sells ancillary electronics products like cables and chargers.

Other stores are also in the spirit of things. Teen retailer American Eagle Outfitters Inc. announced a back-to-school contest whose winner will be featured in the company's spring promotional campaign. Office-supplies retailer Staples Inc. last week rolled out products including binders in new, patterned designs and is offering discounts through its "Back-to-School Savings Pass."

Retailers might be doing well for themselves to get merchandise front and center because there is plenty at stake.

The National Retail Federation estimated that nearly $70 billion was spent on back-to-school and college merchandise last year. That puts the July and August period ahead of all other holidays except Christmas, at $471.5 billion. The trade group hasn't yet made its projection for this year.

But in an NRF survey of consumers with school-aged children, 80.4% said the U.S. economy will affect their school spending plans this year. The figure, while down from 86% in 2011, still suggests how the lion's share of consumers are feeling about their financial condition.

"We've seen 23 straight months of year-over-year U.S. retail sales growth," said NRF spokeswoman Kathy Grannis. "But at the same time, key factors like sentiment and consumers' overall attitude about a strong economy are slipping."

In fact, there may already be some cautionary signs. Summer inventories are "still rather robust" for it being a week from July 4, said Eugene Fram, professor emeritus at the Rochester Institute of Technology's E. Philip Saunders College of Business last week. "There are few 'holes'" in merchandise offerings.

While there is no hard evidence that more back-to-school buying will be done online, indications are that it certainly won't slow. Retailers focusing on apparel and other categories that are in demand during back-to-school season have seen 16% growth in online sales during the second quarter, according to Mercent, which supplies software that helps retailers sell on the Web.

From laptops to sneakers, back-to-school buying "has actually seen a bit of a shift to online, just like everything," said Doug Hart, partner in BDO USA's retail practice. "It's no longer a just going-to-the-store type of event."

There is mixed opinion about whether back-to-school is a good indicator of how consumers will spend during the Christmas season. What's bought is a good bellwether for what's hot in terms of merchandise. But there is enough of a gap between the fall months and the Christmas buying period for economic conditions and sentiment to shift.

The Week Ahead looks at coming corporate events.

Write to Karen Talley at karen.talley@dowjones.com

A version of this article appeared July 2, 2012, on page B2 in the U.S. edition of The Wall Street Journal, with the headline: Back-to-School Sales Creep Forward.