Average spending expected to rise by more than $200, putting some parents in debt
Many Canadians are finding they’re buying fewer items when it comes to back-to-school shopping, but they’re still spending more this year.
The average amount parents intend to spend this back-to-school season is $743, up from $524 last year, according to a new survey from NerdWallet Canada, while 23 per cent of them are buying fewer items this year due to inflation.
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This echoes a similar report from the Retail Council of Canada that said 85.7 per cent are maintaining or increasing their back-to-school spending compared to last year.
Overall, the NerdWallet survey said 92 per cent of parents will participate in back-to-school shopping, while 18 per cent may end up carrying debt from the purchases they make.
“I would anticipate spending probably $300 just on clothes,” Tanya Hayles, a Toronto-based mother shopping for her son entering seventh grade, told NerdWallet. “I would say, overall, probably around $500.”
Canada’s consumer price index (CPI) data released on Tuesday shows that prices in the recreation, education and reading category are down 0.2 per cent year over year for July, while the clothing and footwear category is down 2.7 per cent over the same time period.
There are several strategies Canadians can employ to save a few dollars. For example, 53 per cent of respondents in the NerdWallet survey said they intend to take advantage of sales, while 26 per cent will use coupons and 20 per cent intend to buy some secondhand items.
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Additionally, 65 per cent of respondents intend to buy with a credit card, which can offer cash back or other incentives, but can bring the costs higher if the resulting bill isn’t paid in full or on time.
NerdWallet suggests Canadians use cash to keep their budgets in check or debit to avoid interest. Buy now, pay later programs can offer some temporary relief, but it’s important to read the conditions before agreeing to this method.
The Retail Council of Canada said 71.6 per cent of respondents in its survey prefer to do their back-to-school shopping in person, reversing the online shopping trends of the COVID-19 pandemic.
Canadians appear to be more willing to plan ahead this year as well. The survey said 40 per cent plan to make their back-to-school purchases between two weeks and four weeks before school starts, up by about 10 per cent compared to last year.
Meanwhile, just five per cent of respondents intend to wait until the week before school starts.
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Canada’s inflation rate cooled to 2.5 per cent in July, marking the slowest rate of inflation since March 2021.
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Shelter inflation, one of the main pressures on the Canadian economy, slowed to 5.7 per cent as well, as downward pressures hit both rent and mortgage interest costs.
Economists suggest the data shows sticky inflation is fading and all but secures another Bank of Canada interest rate cut in September.
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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
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