The National Retail Federation (NRF), the nation’s largest retail trade group, estimated in July that back-to-school and back-to-college spending will reach a record-breaking $108 billion as an increasing number of students and families prepare for in-person instruction this fall.
The NRF maintains a positive but cautious outlook due to the fact that the delta variant has led to a sharp increase in cases and hospitalizations and forced many companies to delay reopening plans.
"While we are optimistic about improved macroeconomic conditions during 2021 as more people get vaccinated, the delta variant is of concern because of its increased transmissibility and the potential to hinder economic activity," Katherine Cullen, the NRF's senior director of industry and consumer insights, told FOX Business.
Cullen noted that "despite these new circumstances, some families may already have most of their shopping done," especially depending on where in the country they live.
She drew attention to the NRF and Prosper survey that indicated that shoppers have finished about half of the shopping (51%) they need to do for the upcoming school season as of early August.
Economist Michael Szanto told FOX Business that although the delta variant has "rattled" some reopening plans, "big business and the consumer have a lot of cash saved up and are ready to spend," he said.
"There has been a lot of excitement about back-to-school shopping with hopes of a somewhat return to normalcy in school," Szanto added. "For example, both Visa and MasterCard have reported very robust consumer spending, particularly at brick-and-mortar stores."
Mastercard SpendingPulse, which tracks spending across all payment forms including cash, forecasts that spending will be up 5.5% between July 15 and Sept. 6. That’s compared with the year-ago period when sales were up a modest 1.2% as the pandemic wreaked havoc on schools’ reopening plans and back-to-school shopping.
Looking ahead, Szanto said "if the virus gets worse, consumers may get more cautious" and that the "most concerning issue is if we are repeating pattern from last summer."
The Associated Press contributed to this report.