A big opportunity for tutoring businesses

Plus: Where are Charlotte's digital haves and have-nots?; Tweetsie Railroad reopens; Doug Smith dances his way through the pandemic; Will massive purple Truist logos detract from Art Deco bank tower?

Jul 20, 2020

Pencils? Books? Apples for teacher? Not this year. Consumer back-to-school spending is shifting to electronics and tutoring services. (Photo by Element5 Digital/Unsplash)

by Tony Mecia

Usually, this is the time of year when retailers start their back-to-school sales, hoping to lure shoppers with deals on sneakers and shirts and binders.

Forget that. The idea of returning to school is so 2019. Virtual learning at home is the hot trend now — and consumer spending is shifting to accommodate the reality that “back to school” now means “around the house.” No new backpacks or outfits needed.

To understand the big changes, The Ledger talked last week with Rod Sides, who leads the national retail practice for consulting firm Deloitte and who is based in Charlotte. Deloitte works with nearly every big U.S. retail company on strategy, and released a consumer survey this month on back-to-school shopping to illuminate the changing landscape. Remarks were edited for clarity and space.

Q: What are some of the big takeaways? What are the big trends, and what are the surprises?

Probably the biggest surprise is the level of spending. I’ve been in retail for 30+ years. I expected, based on unemployment and some of the uncertainty, that spending would be down dramatically. When you look at like-to-like categories, it declined about 5%. We added a hygiene category. We know people are buying masks and hand sanitizer. When we add that in, it’s up 2% year over year, which was surprising.

Our friends at the National Retail Federation put out their study earlier in the week. They see it also going up.

Another trend that is probably more dramatic than we thought it would be was away from in-store and into online. Historically, back to school has been an in-store experience: 56% to 58% of the time, folks expected to shop in stores. It makes sense: You take the kids in, you try on new sizes, etc. It’s a little bit of a rite of passage. Take them to the store, let them pick out the backpack, etc.

This year, what we found is that dramatically decreased. The amount of shopping in-store went to 43% from the mid-50s. Online grew to almost meet it, about 37%.

The big question is: Will they remain there? I think a lot of them will.

Q: With back-to-school spending, if you’re not going back to an actual school, what is the spending for? Traditionally, it has been clothes, but if you’re hanging out in your basement on a Zoom call with your teacher, what are the expenses?

We have seen the mix shift. We are seeing apparel and school supplies drop. We’re seeing computer hardware and electronic gadgets increase.

There is also a pretty high degree of folks who are starting to spend on online courses, online tutoring. We didn’t expect to see that. That was pretty interesting.

Q: How do these trends in back-to-school spending fit in with overall consumer spending?

Overall spending has fluctuated a little bit. It’s down year over year, but the move to online has been dramatic. In June alone, we saw a 76.2% increase in online shopping year over year, down from about 83% in May.

I think consumers would love to get to some level of normalcy, whatever that is. I do think there is some pent-up demand as people are going back to work.

As we went into the lockdown, and these stimulus checks came out, the savings rate went way up in late March and early April. Usually, when you have a confident consumer and a high savings rate, it bodes well for consumer spending. The confidence is a little bit shaken, but the savings rate is up. There’s some dry powder for folks to be able to go back and do some shopping.

Q: What is the implication of this for retailers?

If you are strong in the categories that people are buying — some hardware, gadgets, etc., in your assortment — then you have a chance to have a good rebound. If you’ve relied on apparel as a key differentiator, I think you’re going to have to sharpen your pencil and be really competitive on price and value.

Q. Any other trends stick out?

In the survey, there was a lot of anxiety parents have and doubts around the value of what they got from an overall educational perspective. There were only 50%-60% of folks satisfied with the learning resources they had going into the shutdown. About 43% of them were worried about, “Is my kid ready for the next grade?” I’ve got a rising high school junior, and I’m not sure how much she got in the last quarter of the school year.

If that anxiety continues, I could see us having more online resources grow. There’s an opportunity there for those kinds of services to step in. We have never really seen services as a viable threat to traditional spending for back to school. Now suddenly, it is.

Q: If I have a tutoring business or an online service, is that a good space to be right now?

There is a chance for tremendous growth. It could be tutoring. It could be different learning resources to tap into this angst. If you run that kind of business, you might underestimate the anxiety that parents are feeling about, “Are my kids prepared?”

Q: Are we going to see back-to-school sales? O will that be muted?

I think it’s going to be muted. When this hit, a lot of our clients cut way back on their ad spending. They also reconfigured their campaigns around safety. They’re trying to be empathetic about the moment we are in.

Still a sales tax holiday — if you drive to S.C.

If you are planning to hit the stores for back-to-school shopping, consider that South Carolina still has a tax-free shopping weekend on the books. From Aug. 7-9, most purchases of clothes, computers, software, printers, musical instruments and even some bed and bath supplies are exempt from sales taxes. Details here.

North Carolina no longer has a sales tax holiday.

Today’s supporting sponsors are T.R. Lawing Realty…

… and Landon A. Dunn, Attorney at Law in Matthews:

CMS virtual learning: Who has internet at home, and who doesn’t?

This might not shock you, but with Charlotte Mecklenburg Schools going to all-online instruction this fall, the local households that lack internet service at home tend to be clustered in low-income communities north and west of uptown, with another pocket in east Charlotte.

Wealthy south Charlotte, though, has almost total access to the internet in the home.

Here’s the map for Mecklenburg County, based on the most recent census surveys, that shows the percentage of households lacking internet connectivity by census tract. The darkest purple is more than 30%. The white is below 10%:

In one census tract north of uptown, between Beatties Ford Road and I-77, 48% of households lack internet service, census data show. But in a different tract, near SouthPark mall, the figure is less than 1% without internet access.

Oh, and libraries aren’t open yet for students to head in and do work, either.

CMS is making laptops or iPads available to all students, which they can pick up during their three-or four-day orientation in August before full-time online instruction kicks in.

In the spring, CMS offered internet hotspots to families who needed them, and Superintendent Earnest Winston said in May that the district has enough computers and hotspots for everyone. Sounds like another piece of logistics to keep an eye on. —TM

Related news:

Commissioner concerned: County commissioner Vilma Leake, who represents west Charlotte, wrote a letter to Superintendent Earnest Winston expressing concern about the CMS all-online instruction plan: “Here we are again, neglecting the children who need to be in a more structured environment with trained teachers in order to receive a proper education,” she wrote. “… Yes, we are suffering from a virus, but we are suffering even greater when we cannot read, write and do arithmetic.” (WSOC)
School at the Y: Charlotte’s 12 YMCA branches will offer a full-day, in-person “back to school” program from 7 a.m. to 6 p.m., where students from preschool to 12th grade can “complete their virtual learning school work, take part in other enrichment programs, social-emotional activities and physical education.” The cost varies, and there’s already a waitlist in some locations. (WSOC)

Waltzing his way through the pandemic

The subject line that hit our inbox Sunday afternoon brought a smile to our faces: “I wrote a column that might interest you. If you like it, you get the worldwide rights for free.”

Like other media, The Ledger receives a lot of story pitches. But we’ve never had one before from our friend Doug Smith, the longtime Charlotte Observer business columnist who was inducted a few years ago into the N.C. Journalism Hall of Fame. Smith, 76, retired in 2009 after more than 40 years at the Observer. He was a household name and chronicled some of Charlotte’s biggest real-estate and development stories.

So of course we’ll share his column — which is vintage Doug Smith. Filled with self-effacing humor, it’s about how he and his wife of 51 years, Linda, have been weathering the pandemic. And he shares his advice with you:

I haven’t seen my 96-year old mother since March 9. She is locked down in a nursing home.
Our Sunday lunch with our children and grandchildren has been on hold for four months.
Leaving the house, socializing with friends, dining out, shopping and simply coming in contact with others is high risk for my generation during this harrowing pandemic.
You hear people say it’s like being in prison. I think that’s an overreaction, but overcoming the daily monotony and preventing depression during such confinement is certainly a daunting challenge.
I’ve created my own survival plan — not to discount the gravity of this crisis — but to inject a little creativity, curiosity, humor and much needed physical exercise into my daily routine.
I’ll share a few of the things that are working for me and some that aren’t. Along the way, perhaps that little light bulb will go off in your head and you will see a way to steer clear of the coronavirus doldrums.

You can read Doug’s full column on our website.

Bonus feature: A YouTube video of him and Linda, dressed in formal attire, dancing to Patsy Cline’s “Tennessee Waltz.”

The Ledger interviewed him a year ago for his perspective on Charlotte’s growth and development. You can read that here. —TM

Zeus shows his displeasure with Charlotte

Photographer Myles Gelbach captured this photo of the uptown skyline on Saturday afternoon. He tells The Ledger: “It was taken from my rooftop patio off of the rail trail. I saw the storm coming, grabbed my camera bag, tripod, and ran upstairs to take the pictures after I heard thunder. I started taking a long exposure time lapse in order to try to get one picture of lightning in there.”

Join Ledger editors Wednesday for online chat

Mark your calendar for Wednesday at noon, when Ledger editors Tony Mecia and Cristina Bolling will hold an online discussion about … well, anything you’d like to talk about. Questions about why we cover what we do? Ideas for topics we should be paying more attention to? Something you really like about The Ledger, or totally detest? A burning question about a topic in the news you’ve been meaning to ask? Join us. We’re all about transparency and building a community of smart people who care about Charlotte and its future, so we’re happy to hear from our readers.

How it will work: The discussion will be open exclusively to paying subscribers, who are our core customers and who make it possible for The Ledger to exist. They will receive an email with instructions on how to join on Wednesday at 12:00. It will be an online chat (not video or audio), using a feature called “threads,” and it will last about 30-45 minutes. We’ve done this before to hold Q&As with experts on Charlotte development, Covid and financial advice, and they have worked well.

But we’ve never held one with Ledger editors. Will we be mercilessly trolled? Will anyone show up? Join us and find out.

The discussion will be available to read online afterward. As always, anybody is welcome to reach us by email. Tony is at editor@cltledger.com, and Cristina is at cristina@cltledger.com.

In Brief:

Major League Baseball in Charlotte? A play-by-play announcer for the Toronto Blue Jays says the team could play its home games this season in Charlotte, after the Canadian government barred it from hosting games in Toronto over fears that U.S. players would spread the disease. The team is said to be considering sites including Buffalo and Florida, but announcer Dan Shulman said a city with a modern minor-league ballpark such as Charlotte could make sense. The team is supposed to decide by Tuesday. Games will be played with no fans in attendance. (WFNZ’s Travis Hancock on Twitter)
Tweetsie Railroad reopens: Trains started up again at Tweetsie Railroad in Blowing Rock on Friday, but the rest of the rides at the park remain closed. “We are opening with train ride only, just as we did in July 1957,” a spokeswoman said. Some shops and eateries are also open. Trains are running at half capacity, and guests must wear masks. Admission is $10 for adults and $7 for children. (WBTV)
Park Road affordable housing: The City Council is expected to approve a plan tonight that would allow construction of a building up to 80 feet high at the YWCA on Park Road, which would contain 104 apartments. The YWCA has said the apartments would be for people making between 30% and 60% of the area’s median income.
Hospitalizations ‘stable’: Covid hospitalizations in Mecklenburg remained “fairly stable” last week, according to the county health department. There were 183 Covid patients in the hospital as of Wednesday. (Mecklenburg County)
UNC system considers ‘worst-case scenarios’: The UNC board of governors has asked university chancellors to prepare estimates of financial losses if they are forced to close their campuses because of the coronavirus, including “cancellation of fall athletics.” The UNC system has been planning to have students on campuses but has asked chancellors to “develop financial models that reflect potential worst case scenarios resulting from Covid-19,” board of governors chairman Randy Ramsey said. (Policy Watch)
Worthy read: “Special report: 10 days in tent city with the ‘new faces’ of homelessness in Charlotte” (Agenda)
Drive-in movie theater booming: The owner of Hound’s Drive-In in Kings Mountain says business has quadrupled compared with 2019. He built a stage with state-of-the-art lighting to accommodate the many bands who want to play concerts there, and he has spoken with several big-name bands who are organizing a drive-in tour. “It’s like I told my wife: This is my time to shine,” he says. The Ledger wrote about the drive-in in March. (WFAE)
Krispy Kreme donut machine: “Krispy Kreme’s new test kitchen is opening soon in South End, and it’ll have a donut vending machine.” (Agenda on Instagram)
Truist logos on bank tower? Will Truist be able to slap four big signs on the top floors of its uptown bank tower on North Tryon Street? We’ll find out tonight, as its request to do that goes before the City Council. Two of the signs would be about 70 feet x 14 feet, and the other two would be nearly 24 feet x 24 feet. City planning staff and the city’s zoning committee says the signs should be allowed, but three zoning committee members believed that “the former Hearst Tower is a wonderful example of Art Deco, … it helps create a sense of place, contributes to a unique skyline [and that] potential signage on the upper stories will detract from those features.”

Taking stock

Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:

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Executive editor: Tony Mecia; Managing editor: Cristina Bolling; Contributing editor: Tim Whitmire; Reporting intern: David Griffith

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