Dive Brief:
- Kohl’s is touting “thousands of products under $25” for the back-to-school season as consumers keep a grip on their budgets even as their concerns about inflation have eased somewhat.
- The department store’s assortment includes brand names like Nike and Levi’s plus a range of private labels to help families get ready for the school year.
- The retailer in its release Wednesday also drew attention to changes to the shopping experience, with “curated, style-led displays, clear signage, and new digital tools.” The latter includes an AI-powered assistant that provides personalized product guidance, recommendations and outfit inspiration.
Dive Insight:
The back-to-school season often means sales at retailers, but low prices promise to be in particular focus this year, as the National Retail Federation finds that a third of consumers are planning back-to-school purchases around summer promotions.
Budgets this year ahead of school’s start rose about 11.7% compared to 2025, to $489 per child, according to data from JLL released late last month. As usual, less wealthy households are especially under pressure.
Those earning more than $100,000 are driving spending, and their concerns about inflation have dropped sharply from 2022, according to NRF. Lower-income households are also less concerned than they were during that inflationary period four years ago, but “remain worried about prices and are looking for ways to stretch their dollars,” NRF said.
Inflation hit a three-year high last month, and some economists say fallout from the Iran war and gas prices is still to come.
Kohl’s is calling attention to its private labels, including Kids’ SO, Sonoma Goods for Life and Jumping Beans, whose tops and bottoms are priced at about $7 and its Tek Gear fleece, which starts at about $20. The retailer launched a low-price “deal bar” early this year that could boost impulse purchases.
The department store joins others in its emphasis on pricing. Dollar General and Staples are highlighting products available for $1 and under and giving teachers extra discounts.
“Today's families are looking for more than just a back-to-school checklist — they want confidence that they're making the right choices for their kids and their budgets,” Kohl’s Chief Marketing Officer Christie Raymond said in a statement.
The season could be crucial for Kohl’s, which has been laboring for years to get traction in its turnaround. Kohl’s Q1 net sales fell 1.7%, with comps down over 1%. Gross margin expanded by 4 basis points, and its $14 million net loss was a $1 million improvement from 2025.
“The company is seeing some momentum from its initiatives to improve its assortment, value positioning, and the shopping experience,” David Silverman, senior director at Fitch Ratings, said after Kohl’s earnings report in May.