Kohl's Rolls Out Another Round of Back-to-School Deals Amid Cautious Consumer Spending
Kohl's on Wednesday introduced additional back-to-school promotions, including discounts up to 50% and Kohl's Cash opportunities, following last month's 'thousands of products under $25' campaign. While Placer.ai data shows store visit declines narrowed in Q2, Circana and Morgan Stanley warn of a 'moderate at best' season, despite NRF's forecast of record sales.
Kohl's on Wednesday unveiled a fresh wave of promotions targeting back-to-school shoppers, building on its earlier seasonal push that advertised “thousands of products under $25” last month. The department store chain said on Tuesday it is cutting prices by as much as 50% across a range of school supplies, apparel, and beauty items. Customers will also have opportunities to earn $10 in Kohl's Cash for every $50 spent, redeemable toward future purchases. Over the weekend, the retailer is running a giveaway where shoppers can receive between $5 and $100 in Kohl's Cash, while supplies last.
The latest round of deals comes as Kohl's continues to lean on value pricing to attract customers—a strategy that appears to be gaining some traction, according to research from Placer.ai. In the second quarter, store visits fell 1.4% compared to a year earlier, a marked improvement from the first quarter, when visits dropped by nearly 8%.
Retailers across the sector are scrambling to win over consumers who have become increasingly selective about their spending, as higher gas and grocery prices strain household budgets. However, offering discounts may not be enough, according to a recent Circana report. Shoppers are carefully weighing not just the price of an item but also how much they truly want it. This dynamic suggests that the back-to-school season could be “moderate at best,” the researchers found.
Morgan Stanley analysts, led by Alex Straton, echoed that caution. In a note released Monday, they said they are “slightly more cautious” compared to trade groups and others that anticipate a strong back-to-school season. A month ago, the National Retail Federation forecast that back-to-school sales would grow nearly 10% year over year, reaching $43.3 billion.
“A later build remains possible, but for now, we expect conservative 3Q guidance, & absent a demand inflection, believe consensus estimates may prove a touch too high,” Morgan Stanley wrote in its research note.
While retail sales were fairly robust during the first half of the year, some analysts caution that momentum could shift in the third quarter, as many retailers lap the period last year when tariffs first took effect.