EM253 Marketplace: Back to School Retail

Transcript of the audio file:

July's retail sales figures came out today - The numbers are flat, and that is disappointing news for most retailers including JCPenny, which hoped that summer sales and the first tax rebate checks would pull shoppers into stores. As Marketplace's Sarah Gardner reports, retailers are pinning many of their hopes, now, on the American teenager.

Did you know there are almost 50 million teenagers out there, prowling the malls armed with paychecks from part-time jobs or Mom's wallet? It's a scary thought to some of us, but to retailers, these kids are like honored guests at a banquet.

"They really love to shop. Actually, when asked what the number one cure for boredom is, 27% said shopping." That's Matthew Dakota, deputy editor of Teen Magazine. He's talking about teenage girls, actually. It's been said that teens account for 31% of all the spending at shopping malls. And Dakota figures they'll each spend, on average, 500 bucks on school clothes, accessories, and supplies this season. He says it's not just jeans and sweaters anymore, although there are those -- this year it's jeans riding below the belly-button -- but kids need more than that, he says. Like high-end back-packs since a lot of schools don't do lockers anymore. And duh! You have to have, you know, like, gadgets, you know. "Instant messaging is huge, obviously cell-phones will continue to be huge. Everyone is starting to see cell-phones more as a must have than a perk."

Well, maybe that's Teen Magazine's shop-til-you-drop readers, because the National Retail Federation actually expects Americans to cut back on school spending this year. The group is forecasting $457 per household on school clothes and supplies; that's down from $549 last year when the business headlines weren't full of corporate layoffs and other gloomy financial news. That's why retailers are trying their darndest to lure teenagers in with special promotions. JC Penny has one with Seventeen Magazine called "Diva for a Day Sweepstakes." Penny's Tim Lyons: "The idea being that the winner will get the full 'diva' star-treatment for a day: going to a concert, riding in a limo, getting a makeover from a professional, and a shopping spree at JC Penny."

Boston Store, a Milwaukee area department store chain, is going so far as to hire some Backstreet Boys look-alikes to perform at their stores next week. They hope these heartthrobs will put teenage girls into their stores and in the mood to spend. Retailers like Penny's, Wal-Mart, and Target could be the biggest back-to-school winners since cautious consumers are searching for bargains. But in their zest for profits, retailers are finding they've got to be careful not to offend Mom and Dad. Penny's recently had to pull a commercial for some "hipster jeans" that angry parents called "inappropriate," and the clothing chain Wet Seal outraged some moms by peddling skintight playboy t-shirts.

One middle-school principal told the Washington Post recently that teen fashion has become "outrageous." Her school's dress-code must now spell-it-out. No underwear, no cleavage, no midriffs. I'm Sarah Gardner, for Marketplace.