Parents struggle to budget for school supplies as inflation increasingly hits the essentials: poll

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The back-to-school shopping season could be a relative failure for retailers nationwide as households grapple with much higher costs for necessities such as gas, rent and food.

That’s according to a new exclusive Yahoo Finance/Morning Consult poll of 4,400 adults over the past week.

About 50% of respondents say they are concerned about being able to buy school supplies for their children in the next month. In total, 20% say they are very worried. About 78% of adults say they will cut back on discretionary spending to pay for school supplies, and about 25% of those surveyed are not confident in their ability to afford school outings.

A woman buys back to school supplies at a Walmart store in San Diego, California August 6, 2015. REUTERS/Mike Blake

The cautious back-to-school spending comes as 63% of respondents say they are worried about being able to buy gas for their cars.

And the cracks in the consumer armor that help drive the U.S. economy are increasingly showing up in the broader stock market.

Walmart, the world’s largest retailer, cut its second-quarter and full-year profit outlook on Monday due to runaway inflation and a consumer pullback to discretionary items such as clothing. Walmart is now seeing full-year profits fall 11% to 13% from a previous estimate of a 1% decline.

Shares of Walmart plunged 7.6% on Tuesday.

“Walmart is normally a safe haven when things get choppy in retail. But with inventory and costs rising, pricing power should prove critical to earnings in 2023,” Greg Melich wrote. , an Evercore ISI analyst, in a note to clients.

The major retailer’s main rival, Target, sparked concerns over the health of the retail sector in June with a shock decision to liquidate massive amounts of slow-moving inventory and take a more cautious view on profits. short term.

Other retailers such as RH, Bed Bath & Beyond and Kohl’s issued a more cautious outlook as consumers shift spending away from discretionary categories.

“There’s this pivot that’s happening from discretionary and general commodities to staples,” Jefferies analyst Stephanie Wissink said on Yahoo Finance Live. “The household has to make smart decisions every week about how to finance that inflation.”

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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