Parents struggle to budget for school supplies as inflation increasingly hits essentials: Poll

The back-to-school shopping season may be a relative flop for the nation's retailers as households grapple with much higher costs for basic necessities such as gas, rent, and food.

That's the takeaway from an exclusive new Yahoo Finance/Morning Consult poll of 4,400 adults taken within the last week.

Roughly 50% of those surveyed say they are concerned about being able to afford school supplies for their kids over the next month. A total of 20% say they are very concerned. About 78% of adults say they will cut back on discretionary spending to afford back to school supplies, and about 25% of those polled aren't confident in their ability to afford school field trips.

The cautious spending for back to school comes as 63% of those polled say they are worried about being able to afford gas for their cars.

And cracks in the armor of consumers, which help drive the U.S. economy, are increasingly playing out in the broader stock market.

Walmart, the world's largest retailer, slashed its second-quarter and full-year profit outlooks on Monday owing to rampant inflation and a consumer retrenchment for discretionary items such as apparel. Walmart now sees full-year earnings tanking 11% to 13% compared to a prior estimate for a 1% drop.

Walmart shares plunged 7.6% on Tuesday.

"Walmart is normally a safe harbor when things get choppy in retail. But with rising inventories and costs, pricing power is likely to prove critical to earnings into 2023," Evercore ISI analyst Greg Melich wrote in a note to clients.

The big box retailer's primary rival Target kicked off concerns about the retail sector's health in June with a shocking decision to liquidate massive amounts of slow-moving inventory and take a more cautious view on near-term profits.

Other retailers such as RH, Bed Bath & Beyond, and Kohl's have issued more cautious outlooks as consumers shift spending away from discretionary categories.

"There is this pivot happening from discretionary and general merchandise into necessities," Jefferies analyst Stephanie Wissink said on Yahoo Finance Live. "The household is having to make discriminate decisions every single week about funding that inflation."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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