Large retail corporations such as Walmart and Target are planning on seeing large back to school sales increase for the latest quarter. Last year, many back to school sales were dampered because of the COVID-19 virus, as many students around the country were not attending school in person. This year, there is expected to be a 6.4% rise in the retail industry as a result of these back to school sales. According to analysts, this will cross a $100 billion mark.
There are many reasons as to why sales in retail stores like Target and Walmart are expected to do so well. For some students, this is their first time to return to a classroom in a year, as so many had to attend school online, at home, last year because of the pandemic. Consumers also have more cash on hand than average in the United States right now, possibly because of COVID stimulus checks and advance child tax credits.
Pent up demand may also be a cause of this large increase in sales. Just as when people started shopping in stores for the first time earlier this year with no pandemic regulations or restrictions to stop them, many parents are shopping for their children and have a high demand for items like new school clothes. As a result of all of these factors, many analysts are anticipating that this may be one of the best back to school seasons for retail industries in a long time.
This all comes amid growing concerns and tensions over the new Delta variant, which has caused COVID-19 cases to surge around the nation. Plus, the nation is still struggling with labor and raw material shortages, as well as detrimental global supply chain problems. Even with all of these issues, Walmart and Target are still expected to do quite well this quarter.
This is beneficial to economists for many reasons. Often, a good back to school season in retail results in a positive forecast to how the end of the year holiday season will fare. Once the third quarter data comes out, analysts may have a better idea of how holiday season sales may fare. Of course, the Delta variant has begun to throw curveballs to many businesses and industries, so everything does remain up in the air.
However, big retail corporations like Walmart and Target may only continue to do well during the pandemic. Ever since Walmart pivoted to pushing their online business, the company has thrived. Even with this strong online presence, however, Walmart wants customers to shop back in their stores again — and it appears for this back to school season, consumers are.
As the weeks continue, economists may have a better understanding at how the Delta variant — as well as all the other current economic problems the country is facing — will potentially affect business activity for the rest of the year. While economists still expect the economy to experience growth not seen in decades, the Delta variant could cool economic growth, and there are signs that growth could already be slowing down.