(By Dale King) When it comes to back-to-school shopping, the Texas, Oklahoma and Arkansas triad packs more dollar-for-dollar wallop than most other parts of the USA, says a report prepared by SmartAsset, a web-based consumer financial information service provider.
“Because of the region’s relatively low cost of living coupled with healthy median incomes, shoppers have the added bonus of stretching their income at checkout,” the report points out.
“Recent population growth has spurred retailer demand and new development across all three states,” says SmartAsset. “Similarly, the region’s consumers are relatively well positioned financially and are more capable of supporting a more retail-driven market.”
Bargain-hunting for education-related stuff isn’t done yet. “While we’ve already sent the kids back to school, only 13% of U.S. families have finished their back-to-school shopping lists,” said Analee Micheletti research analyst at CBRE, a commercial real estate services and investment firm. “Early back-to-school sales figures indicate revenues are up 2% over last year and are expected to reach $27.3 billion this year.”
The combined estimate for overall U.S. back-to-school spending for grades K-12 and for college this year is $75.8 billion – almost $8 million more than last year,” states Micheletti.
This year’s statistics are not only good news for the back-to-school shopping cycle, which normally stretches from July to September, but they also portend a healthy holiday season ahead for retailers, mall scourers and cyber-shoppers.
“If the first back-to-school shopping results provide a clue as to what consumers are thinking and feeling, this year’s early sales indicate more children are on the ‘nice’ list. Sales are up; some of the best in the past three years,” says the report.
In addition, “online sales continue to play a big role in seasonal retail spending as consumers keep hunting for bargains at supercenters, office supply and apparel online retailers.”
In its report, SmartAssets uses a purchasing power index; that is, a weighted cost of living based on a percentage of median income. Using that formula, the U.S. city with the highest purchasing power in the nation is Denali, Alaska, at 100%.
“Across Texas, Oklahoma and Arkansas, the low cost of living relative to sizeable median income levels equates to some of the highest purchasing power in the U.S.,” the report says. “Half of the nation’s Top 10 counties with the highest purchasing power are located in Texas.”
For example, Rockwall County (situated in the Dallas/Fort Worth metro area) and Fort Bend County (in the Houston metro) are two heavyweight contenders with purchasing power indices higher than 96, placing them in sixth and seventh place nationwide, respectively.
At the state level, Kendall County, located northwest of San Antonio, has some of the highest purchasing power in Texas, says the study. Meanwhile, Canadian and Kingfisher counties in Oklahoma are also making the grade and Benton was the top county in Arkansas for effective consumer leverage.
Even though Texas did better in most areas than either Oklahoma or Northwest Arkansas, Micheletti said “our region is a hot spot in the nation for purchasing power – and that means opportunity for retailers.”
Despite this disparity in spending levels, shopping trends in Texas, Arkansas and Oklahoma generally mirror the rest of the nation, the CBRE analyst notes. “Our region typically shares national purchasing trends which include mostly clothing and school supplies, with a larger percentage going toward electronics like laptops and USBs.”
“The extended back-to-school season ends in September and consumers are delaying school-related shopping longer than ever before. Twenty-two percent of consumers waited to begin shopping until after the first school bell rang.”
They may have delayed the beginning of their shopping, but once they got into the stores – and two-thirds made their purchases in brick-and-mortar structures – they shopped “early and often” to flush out the best deals. Micheletti said shoppers that began their product quest earlier in the season “will spend 26% more than those who waited until the last minute. Either way, the longer season is a boon for retailers.”
She said population “is the principal driver for retail growth in both consumer spending and retailer expansions. In the next 35 years, the Texas population is expected to add 113.2 million residents; however, 60% percent of that growth will be in three metros, Austin, Dallas/Fort Worth and Houston.”
With many more mouths to feed, “there will be built-in demand for retail and, thus, retail development and leasing activity.” She said developments anchored by grocery stores are normally the first to respond to population growth – “a trend we are currently seeing in Houston, which reported the strongest population growth in the nation again in 2015.
Sept. 23, 2016 Realty News Report Copyright 2016