Back to School Market – Pricing Woes

As of Monday August 1st, summer activities and fun in the sun now take a back seat to a new classroom and new curriculums, as children across the U.S. returned to school.

Inflation-driven price hikes set retailers for the strongest back-to-school shopping season on record. With more students returning to physical classroom, following two-years of pandemic driven hiatus, demand for more school supplies/apparel is on the rise. Recent studies performed by Deloitte, indicate spending is expected to jump 5.8% to $34.4 billion this year.1

While one in three households with school-aged children (K-12) say they are in a worse financial position than last year, according to the survey, average spending per U.S. student is still expected to rise 8% to $661. This figure represents a 27% rise from pre-pandemic levels. Consumer sourced supplies across mass merchants, online-only retailers, dollar stores and department stores, but inevitably felt the price challenges regardless of retailer.

Beyond everyday school supplies, consumers are also feeling the pricing pressures while going to stock up on back-to-school lunch items…

Retail Inflation

While inflation across all items hit 9.1% in June, according to the Bureau of Labor and Statistics, Food at Home hit double-digits (12.2%).2 This not only impacts everyday grocery trips, but it also now effects the back-to-school lunch and snack list as well.

Across all/most of the departments, average price (ARP) increases were the sole driver of recent sales growth, as units declined across total store. Among edible departments, which include the three largest sectors, ARP increases land above the previously noted Food at Home inflationary rate of 12.2%.

While these price increases provide an average across each department, some segments saw increases well beyond the average. In some cases, edible subcategories like energy gels and snacks, shelf stable snacks other alternatives and refrigerated plant based yogurt drinkable saw price increase of 69%, 62% and 32% respectively.

Total US, SPINS Natural Enhanced Channel + SPINS Conventional Channel (powered by IRI) |4 weeks ending 6.12.2022



Lunch Staples

Back-to-school sacked lunch items are also not immune to rising costs. Items like frozen and refrigerated deli meat, shelf stable fruit spreads / nut and seed butters, and bread and baked goods, all saw price increases. Even food storage bags and wraps saw moderate sales growth (3.7%), driven primarily by an increase in ARP (15.6%), while units declined (-10.3%).

Building a school-worthy sandwich to sustain you until the end of day, now comes at a higher cost. Everything from the breads and baked goods prices are up (14.3%), to the sandwich fillings and proteins. Among the top five deli meats, all displayed strong double-digit growth. However, most deli meats ARP increases outpaced their total growth.  While prices increased across all product positioning groups, conventional deli prices increased at a rate of 2x their natural and specialty counterparts.

Total US, SPINS Natural Enhanced Channel + SPINS Conventional Channel (powered by IRI) |4 weeks ending 6.12.2022 | Product Type | Positioning Group | Exclude PVL Items

Consumers seeking a more budget-friendly sandwich alternatives, may find some relief including a classic peanut butter option. Shelf stable peanut butter, saw stable dollar (6.5%) and unit growth (5.1%) for the most recent four weeks. Average price increases were far more reasonable for this segment, relative to others. While there is some lower ARP trends on the shelf stable nut and seed butters side of the sandwich, that is not the case for shelf stable fruit spreads. Classic shelf stable fruit spreads with sweetener throws off the budget a bit, as dollar growth was driven by the double-digit (18.7%) ARP spike.

Total US, SPINS Natural Enhanced Channel + SPINS Conventional Channel (powered by IRI) |4 weeks ending 6.12.2022

Snack Attack

No lunch is complete without getting your snacking fix. Something salty, savory, and crunchy always helps tie the whole meal together. Shelf stable chips and pretzels and snacks, a $2.4B dollar category for the most recent four weeks, also felt the inflation sting. The total category increased sales by $295M (14.0%), however the story is no different than the other lunch item segments. Units declined (-3.1%), as ARP increased (17.7%). While all items increased in price, conventionally positioned items, which account for the lion’s share of sales, increased at a faster rate.

Total US, SPINS Natural Enhanced Channel + SPINS Conventional Channel (powered by IRI) | 4 weeks ending 5.22.2022

Among the top six shelf stable chips and pretzels and snacks subcategories, units declined across most segments. Shelf stable snacks other alternative and shelf stable pretzels were the only two subcategories that posted sales growth that outpaced their rise in ARP.


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