CNBC's Courtney Reagan joins 'Squawk on the Street' with the latest news on annual back-to-school sales, how tariffs are impacting prices, and more.

Washington

Retailers are launching back-to-school sales as families prepare for the new academic year, with tariffs contributing to higher prices on school supplies. According to a Deloitte survey, parents expect to spend about the same as last year—around $570 per student—but when adjusted for inflation, this represents a decrease in real spending.

The survey also reveals shifts in consumer behavior: lower-income families plan to spend more due to higher prices, while higher-income families are cutting back because of economic concerns. Over half of parents are worried about increased costs, leading many to delay purchases, choose different brands, or spread out their spending over time.

Tariffs weigh on back-to-school

Welcome back. Summer underway. Retailers already pushing back-to-school sales, and tariffs are having an impact on how families are spending for their students. Courtney Reagan joins us. She has that story. Courtney. Hi, David. So this week's retail discount events are expected to spur some back-to-school spending, and while these sale events have sort of been this back-to-school catalyst for about a decade now, tariffs are playing a hand in the details this year, according to Deloitte. Now, almost half of parents of children in grades K through 12 plan to shop during Amazon Prime Day sales for back-to-school items, which is about on par with last year. Overall, for back-to-school spending, the consultancy group's annual survey shows that parents expect to spend also about what they did last year, $570, or $16 less than 2024. But how do higher prices this year compare to last year then play into that projection? So Deloitte's Brian McCarthy notes the survey doesn't adjust for inflation. So if you adjust using the all-item CPI rate of 2.4%, it would mean parents plan to spend $29 less than last year, or 5%, even with those higher prices. So what's more interesting is that that average $570 in projected spend comes from the income cohorts spending in opposite directions, but maybe opposite of what you might think. It certainly surprised me because lower-income families plan to spend more, but because of high prices, while high-income families expect to actually pull back because of economic concerns. Now, just over half of all the parents say they are concerned about higher prices this year for back-to-school items, which is impacting how they will shop. So what will they do? Well, 7 in 10 parents say that they are willing to wait longer for delivery if it saves them on shipping costs. And three-quarters say they'll pick a different brand altogether if their preferred brand is too expensive. That's much higher than answered that last year. Overall, spending is expected to skew towards essentials, trading down on brands and retailers, and just generally spreading out purchases over time. Carl? Courtney, it's a complicated time right now for consumer psychology. That's a good explainer. Courtney Rankin, thanks.

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