Back-to-school retail spending expected to grow 7.5% with department stores making a comeback

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Even with surging inflation, experts project an increase in back-to-school retail sales that may even surpass pre-pandemic levels. 

From mid-July through Labor Day, retail sales nationwide are projected to grow 7.5% compared to the same period in 2021, according to the Mastercard SpendingPulse.

Compared to 2019, sales are anticipated to be up 18.3% "with Department Stores expected to be a noteworthy winner as the sector continues its recent rebound," according to the report. 

People walk through a shopping area in Manhattan on June 7, 2021.  (Angela Weiss/AFP via Getty Images / Getty Images)

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In fact, anticipated back-to-school retail sales between July 14 and Sept. 15 are expected to "drive the Department Store sector up 13%" compared to a year ago, and up 27.3% compared to 2019, according to the report. 

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Department stores faced a multi-year decline before making"their way into the spotlight after 15 consecutive months of sustained growth," the report said. 

Meanwhile, e-commerce sales during that time period are expected to increase 4.3% compared to a year ago. They are expected to grow a whopping 89.3% compared to 2019. In-store sales are projected to be up 8.2% compared to 2021 and up 9.9.% compared to 2019. 

Shoppers wait in line to pay for their purchases at a Walmart store in Los Angeles, California, on Nov. 24, 2009. (Robyn Beck/AFP via Getty Images / Getty Images)

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Mastercard senior adviser Steve Sadove said the back-to-school shopping season is the second-biggest season for retailers. It's also "often looked at as an early indicator of retail momentum ahead of the traditional holiday season," Sadove said. 

Although Mastercard SpendingPulse anticipates growth across sectors, "retailers will need to find innovative ways to entice shoppers as discretionary spending potentially stretches thin as a result of increasing prices." Sadove added. 

This past month, U.S. retail sales, excluding automotive, increased 10.5% compared to a year ago and surged more than 21% compared to pre-pandemic times, according to the Mastercard report.

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