Clothing Stores NAICS 458110

Jul 25, 2025 - Price Concerns Drive Earlier Back-to-School Shopping Trips: Survey

• Back-to-school shopping is inching earlier, with 67% of respondents already shopping in early July 2025 compared to 55% in 2024, according to an annual back-to-school survey released by the National Retail Federation and Prosper Insights and Analytics. The top destinations for back-to-school shopping include online (55%), department stores (48%), discount stores (47%), and clothing stores (41%). Half of back-to-school families report shopping earlier this year, out of concern that prices will increase due to tariffs. According to the survey, “Consumers are being mindful of the potential impacts of tariffs and inflation on back-to-school items, and have turned to early shopping, discount stores and summer sales for savings on school essentials.” The survey estimates that total US back-to-school spending for families with students aged elementary through high school will reach $39.4 billion, up from $38.8 billion last year.
• The Retail Trade Industry is one of 10 industries reporting growth in June’s Services ISM Report on Business. Executives in the Retail Trade industry reported an increase in business activity, prices paid for materials and services, and inventories along with slower supply deliveries, a decrease in order backlogs, and lower employment in June. Additional industries reporting growth during the period were Other Services; Transportation & Warehousing; Utilities; Arts, Entertainment & Recreation; Management of Companies & Support Services; Wholesale Trade; Public Administration; Information; and Real Estate, Rental & Leasing. Six industries reporting contraction during the period were Agriculture, Forestry, Fishing & Hunting; Construction; Mining; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Educational Services. Overall, economic activity in the services sector grew in June after a contraction in May, with the Services PMI registering 50.8%.

• According to a recent report in the Wall Street Journal, retailers are cutting back on free shipping to offset tariff costs. Some retailers are eliminating free shipping, while others are raising the amount that customers must spend to qualify for free shipping, as a way to pass along higher costs to consumers. Retailers may also drive customers to join a loyalty program to receive free shipping. Retail-technology provider Narvar noted that the average minimum-order threshold for retailers to offer free shipping has increased from $82 in 2023 to $103 in 2025. Adjusting the shipping price is appealing to retailers since it does not change the front-facing shopping price to consumers, per Narvar CEO Anisa Kumar. Still, the tactic has risks, as studies show that eliminating free shipping can cause shoppers to abandon an online cart.
• Consumer sentiment, an indicator of discretionary spending, increased slightly in July 2025, rising to 61.8 in preliminary July data from 60.7 in June, according to a report in the Wall Street Journal. The consumer sentiment index from the University of Michigan hit a recent peak in December of 74, buoyed following the presidential election, but dropped to 52.2 in April 2025 as consumers expressed uncertainty about tariff effects and rising inflation. In July, respondents’ inflation expectations for the coming year were an anticipated price increase of 4.4%, which was tracking higher than in January, when respondents expected prices to grow by 3.9%. However, July’s inflation expectation results were lower than June’s, when respondents expected a 5% price increase for the coming year. The index serves as a predictor of consumer spending as it indicates consumers’ perception of their financial prospects and the broader economy.