Walmart (WMT) Eyes Back-to-School Gains as Parents Cut Costs
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A new report from Deloitte has revealed that overall spending is set to remain flat at $30.9 billion, or $570 per student on average. Last year, parents spent an average of $586 per child.
Higher Prices
It appears that the main issue for parents—despite, no doubt, the appeals of their kids for a nice new pink pencil case ringing in their ears—is a hike in prices across all product categories.
Deloitte said that families are expected to focus their spending on necessary items like clothing while reducing expenditures on categories such as technology and school supplies.
More shoppers will trade down to cheaper private-label brands and spread purchases into August, the report added.
That could benefit discount retailers like Walmart, which always makes a big play for back-to-school purchases.
This year, in its Amazon (AMZN) Prime-challenging six-day sales event between July 8 and 13, it is offering major savings on backpacks, laptops, and school supplies. That includes markdowns for Crayola crayons, Sharpie, and Paper Mate.
Longer Deliveries
'Value for the money is the top driver of retailer choice, and parents are increasingly willing to switch brands or retailers to find the best deals,' Brian McCarthy, principal of retail strategy at Deloitte Consulting, said.
The Deloitte survey was conducted online using an independent research panel between May 21 and May 30, involving 1,203 parents with at least one child in grades K-12.
It found that over half of surveyed parents were anxious about the potential for higher prices on back-to-school items and planned to cut back on restaurant meals and recreational activities to manage their budgets.
Demand for standard shipping rose 76%, compared with 63% in 2024, the survey found, signaling shoppers will choose longer delivery times to lower or avoid shipping costs.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 29 Buy ratings. Its highest price target is $120. WMT stock's consensus price target is $111.25 implying a 14.58% upside.
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