How to Save on School Supplies

By Laura Rowley
Thursday, August 12, 2010

I've always been frugal, but as life became more complicated (three kids, full-time job, house in the 'burbs) I found myself less inclined to chase small savings. Or at least I'm more apt to balance the savings with the opportunity cost. Self-righteous purchaser of used cars? Of course. Consumer of slightly-more-expensive bagged salad? Guilty.

Back-to-school has always been one of those gray categories where I wondered if a little extra effort would yield significant savings. So I canvassed the retail competition. Conclusion: It pays to shop around.

Families surveyed by The National Retail Federation expect to spend an average of $96 per child on school supplies, and more than $600 when clothing, shoes and electronics are included. Asked how the economy will affect their plans, 43 percent say they will spend less overall. Nearly 30 percent will make do with last year's school items, and 39 percent say they'll do more comparison shopping with circulars and newspapers.

I spent the good part of a recent weekend perusing online circulars and visiting different retail channels in Connecticut for a Good Morning American segment, comparing the cost of 20 items typically found on a school supply list.

To compare apples to apples in terms of quality, I priced major brand names: Crayola crayons, markers and colored pencils; Five Star notebooks, Avery Binders; Pilot G2 gel pens; Oxford folders; Texas Instruments TI-30 calculator. For more generic items such as rulers, protractors, index cards and loose leaf paper, I focused on lowest price. Finally, I chose plain solid colors on everything -- no patterns or designs.

The Findings

The results were pretty dramatic: The same 20 items on my list cost $27.20 at an independent discount/"dollar" store, and three times as much -- $83.44 -- at the drug store CVS. Big-box stores Target and Wal-Mart came in at $31.64 and $36.70, respectively, and Staples charged $66.72.

Both the independent and chain dollar stores (Family Dollar, Dollar General and Dollar Tree) have grown aggressively in the last decade, adding thousands of stores nationwide between 2001 and mid-2009, according to a study by The Nielsen Company. Nielsen found households earning $100,000 or above spent 18 percent more in the dollar channel in the second half of 2008 compared to the year-earlier period. That was a bigger gain than big-box discounters or warehouse clubs.

"There's no question that the dollar stores are getting more and more shoppers every day," says Britt Beemer, CEO of America's Research Group. "When they added more food products to the stores, they really established value with consumers. They sell bread for $1 a loaf, and at the grocery store it's $1.89 or $2.59. The dollar stores make a stronger value proposition as they added grocery, because people know the value of things they buy most often. Because they attract so many shoppers every week, manufacturers can no longer ignore the channel."

At the store I visited, Xpect Deep Discount, school supplies were grouped near the registers in several long rectangular displays, requiring a simple lap around each to find what I needed. But the selection was fairly narrow and two of the items on the list were already sold out.

"For school supplies, go to dollar stores first and then wait as far until the end of the season as you can, because obviously what they can't sell they will mark down more," says Beemer. The other advantage to dollar stores: If your child wants notebooks and folders with colorful patterns and designs, you'll find the best prices on those items here.

Compare and Contrast

The big-box stores are fairly competitive with each other -- Target beat Wal-Mart by just $5. Target was the more convenient to shop, with back-to-school needs situated in a central showcase. The cashier helpfully suggested I check the store Web site for coupons before I shop next time, and visit a site called Mypoints.com to earn free gift cards. (For other ways to find back-to-school coupons online, check out this story.)

We headed next to Staples, located in the same mall as Wal-Mart. Office supply stores have been trying to capture more of the back-to-school market in recent years. But my shopping test found the prices are higher and the package sizes tend to be larger than standard -- so you pay more and get a lot of "free" extras you don't need. For instance, all the other stores offered four-packs of Pilot gel pens and single servings of Wite-Out. Staples only offered pens in a five-pack and Wite-Out in a two-pack.

Meanwhile, the Staples circular featured Avery Binders as "buy two get one free." But at $15.98 for two, they still cost $5.33 each -- the second-most expensive price for binders after the drug store. Some office supply stores feature back-to-school "penny specials" to get you in the door. If you see one, buy the loss leader and bail out.

As for drug stores: Forget it. My list of 20 items cost $83.44 at CVS. Drug stores "have always been much higher priced than retail store chains," says Beemer. "One reason they are able to do that is they have a lot of shoppers in urban areas who have to rely on public transportation" and can't access a big-box store as easily. Drug stores will occasionally offer special items to get shoppers in the door, but with a basket price more than three times the price of our most affordable store, don't take the bait.