Tag: price increases

  • Backpacks to Binders: Examining Back-to-School Price Hikes in 2023

    Backpacks to Binders: Examining Back-to-School Price Hikes in 2023

    This year’s back-to-school shopping season has presented a considerable challenge for inflation-weary parents in the US. Despite chatter about alleviating inflation rates, the reality of rising prices tells a different story.

    As families hunt for school supplies, apparel, and other essential items for the academic year, the financial strain remains palpable. Experts note that elevated prices coupled with extensive shopping lists have compelled many parents to be more discerning about their purchases, expenditure thresholds, and preferred shopping venues. Essentially, shoppers are looking for more value for their money with every purchase. According to the National Retail Federation’s 2023 projection, this back-to-school season is poised to be the most financially demanding one to date. The forecast anticipates total spending exceeding $135 billion, marking an increase of over $24 billion compared to the previous year.

    At DataWeave, we continually monitor and analyze pricing activity among retailers across popular shopping categories. Our recent study delved into the pricing trends in the back-to-school category, which includes backpacks, fundamental school supplies, binders, planners, writing instruments, and more. The aim was to understand how the costs of back-to-school essentials have shifted in 2023 in comparison to 2022.

    Pricing of Back-to-School Products in 2023

    Our analysis, spanning 1200 products across major retailers such as Amazon, Walmart, Kroger, and Target reveals an average price surge of 9.8% in 2023 compared to the previous year.

    This upward pricing trend can be attributed to retailers’ strategic efforts to guarantee product availability and uphold quality during a period of heightened demand. As the back-to-school season sparks a surge in shopping activity, retailers like Kroger, Amazon, and Walmart are likely adjusting prices strategically to align with the expenses incurred in securing adequate supplies, managing logistics, and meeting operational demands.

    Average Price Increase 2022-23 By Retailer, Back-To-School Category

    Kroger led the way with a 12.1% price hike, the most significant among the scrutinized retailers. It was followed by Amazon with an average increase of 10.5% and Target with 7.8%. Walmart remains the outlier, with the smallest price increases for back-to-school products in 2023.

    Pricing across Categories and Subcategories

    Among the various categories examined, backpacks have experienced the most pronounced escalation, with prices soaring by a substantial 25%. Within the top 10 highest priced backpacks we looked at, the most substantial price hikes were observed for brands like The North Face (44%) and Fjallraven (33%).

    Average Price Increase 2022-23 By Category Across Retailers, Back-To-School

    The Office Organization category also witnessed a significant price surge of 16.8%, attributed to subcategories like File Folders and Desk Accessories, which saw respective price hikes of 31.3% and 25.2%.

    Categories like Memo Boards & Supplies (14.3%), Binders (12.5%), and Themebooks & Portfolios (12.4%) have likewise encountered notable price hikes. On the other end of the spectrum, Planners and Journals saw a modest rise of 4.4%, while Mailing and Shipping Supplies and Office Machine Accessories experienced comparatively lower price increases at 7% each.

    Interestingly, while items like Journals and Writing Instruments maintain popularity year-round, Backpacks and Memo Boards are particularly sought after during the back-to-school season, contributing to more substantial price hikes in these categories.

    On the other hand, consumers are consistently on the lookout for cost savings and deals from retailers, especially as they deal with inflationary pressures. In response, Kroger, Target, and Walmart have introduced back-to-school savings initiatives. For instance, Kroger is offering more than 250 items for less than $3 and some items for just $1, encompassing essentials such as paper, pencils, and glue sticks. Lower price increases across categories like journals and writing essentials could be attributed to these initiatives.

    Brands with the Highest Price Increases across Categories

    Across various back-to-school categories, some brands stand out with significant price increases. For instance, in the Office Organization category, Ubrands leads the pack with a substantial 38.30% surge, followed by Pendaflex at 30.80%. Meanwhile the Backpacks category sees Champion and Adidas recording significant price jumps of 29.6% and 23.6%, respectively.

    Brands with highest price increases across Back to School categories 2022-23

    Ubrands and Pentel from Basic School and Office Supplies Category also record high price increases at 22.70%, followed by Carolinapd from the Themebooks & Portfolios Category at 21.08%. 3M in Mailing in Shipping Supplies shows the lowest price increase at 6.80%.

    Interestingly, the ever popular Writing Instruments category showcases BIC at the forefront, exhibiting the most notable price escalation of 13.2%. Expo trails closely at 11.6%, while Uniball demonstrates an 11.4% increase. Even Sharpie, a beloved writing brand, displays a modest price uptick of 9.3%.

    The average price increments seen across brands mirror the overarching trend of increased costs throughout back-to-school categories.

    Navigating the Competitive Pricing Landscape During the Back-To -School Season

    Given the challenging pricing landscape during the back-to-school season, retailers would be wise to provide lower-cost alternatives alongside popular brand names. This allows parents to easily make substitutions while adhering to a school supplies list.

    With our competitive pricing intelligence solution, retailers can confidently analyze and monitor their prices relative to competition, ensuring they maintain a leadership position in pricing within their desired set of products, while posturing for margins with other products.

    To learn more about how we can help, reach out to us today!

  • Baby Formula Shortage Continues Alongside National Price Increases – June 2022

    Baby Formula Shortage Continues Alongside National Price Increases – June 2022

    As the baby formula shortage continues, retailers and brands are working quickly to meet evolving consumer demand, considering supply chain driven headwinds, a baby formula recall, and inflationary-driven impacts. The DataWeave analytics team has actively tracked marketplace changes, alongside reports from the FDA, for the baby formula category at a state-level, and has shared the latest snapshot of product availability through June 7th, 2022, below.

    Average Baby Formula Product Availability by State - June 2022
    Average Baby Formula Product Availability by State – June 2022

    While the U.S. has reached an average of 84% baby formula availability the first week of June 2022, given recent news headlines related to the baby formula shortage, and tracking out of stock encounters by state, we see a continued decline in availability throughout the Midwest versus product availability levels seen in May 2022.

    Wisconsin, Michigan, Illinois, Indiana, Ohio, and Kentucky all show average availability for baby formula to be less than 50%, with Wisconsin being impacted the most at less than 18% average availability. While Texas shows an average availability improvement of 3.5% from the first two weeks of May 2022 to the first week of June 2022 as noted in the below chart, availability is also very low overall at less than 60%.

    Average Change in Baby Formula Product Availability by State: May-June 2022
    Average Change in Baby Formula Product Availability by State – May 2022 to June 2022

    Outside of the Midwest and Texas, the other states for consumers to be cautious in are California, Virginia, and South Carolina as their month-over-month average change in availability also declined 4%, 12.6% and 8.2% respectively. Below is a snapshot of where the baby formula availability average started as of May 1st through the 15th, 2022.

    Average Baby Formula Product Availability by State - May 2022
    Average Baby Formula Product Availability by State – May 2022

    Baby Formula Product Availability Changes – March 2021 through May 2022

    At an aggregated level overall, the availability for baby formula was relatively stable across all retailers considered within our analysis from March 2021 through September 2021, but has been on a steady decline ever since, starting at 81.7% availability in September and ending at 53.8% availability in May 2022 as noted in the below chart.

    Monthly Average Availability for Baby Formula Across Major Retailer Websites
    Monthly Average Availability for Baby Formula Across Major Retailer Websites

    Looking at baby formula availability at a retail level, we saw yet again not all availability challenges were alike, by month or retailer. Costco.com lead the other retailers within our analysis for greatest average availability from March 2021 through May 2022, but had one of the lowest availability percentages at 62.7% in May 2021, and dropped to the lowest availability of the group in May 2022 at 37.5%.

    Average Availability for Baby Formula Across Major Retailer Websites
    Average Availability for Baby Formula Across Major Retailer Websites

    Baby Formula Prices Increase as Availability Changes

    While unnecessary price gouging is prohibited, price increases are still happening at a slow and steady rate across all the accounts included within our Pricing Intelligence analysis given external market factors outside of baby formula recall related stockout scenarios.

    Kroger.com experienced the greatest average price increases overall, with the peak being in May 2022 at a 19% increase, 8% higher than other retailers on average, versus prices seen in March 2021 for the same baby formula products. The most significant price hike occurred on Kroger.com from December 2021 to January 2022. Other retailers like H-E-B, Target and Wegman’s have had minimal price changes from March 2021 through May 2022. 

    Average Price Inflation for Baby Formula, Indexed to March 2021
    Average Price Inflation for Baby Formula, Indexed to March 2021

    Address the Baby Formula Shortage With eCommerce Intelligence

    As the market continues to evolve and baby formula supply works its way to catching back up to demand, our team will continue providing critical pricing, merchandising, and competitive insights at scale, to enable retailers and brands to develop data-driven growth strategies that directly influence their eCommerce performance, accelerate revenue growth and drive profitability.

    Be sure to reach out to our Retail Analytics experts for access to more details regarding the above analysis, or for more information on our Commerce Intelligence and Digital Shelf solutions, and let us know what other category insights you’d be interested in seeing this year.