NEW YORK — To gauge consumers’ strain, look no further than the rows and rows of plastic bags awaiting layaway payments at Kmart. They are filled with back-to-school basics — not just T-shirts and jeans but notebooks, markers and pencils.
It is unheard of for layaway rooms to be so packed at back-to-school time and for the packages to include relatively cheap school supplies.
A record number of shoppers, shut off from credit and short on cash, are relying on Kmart’s layaway program to pay for all of their kids’ school needs, said Tom Aiello, a spokesman for Kmart parent Sears Holdings Corp. Layaway allows shoppers to pay over time, interest-free, and pick up their merchandise when it’s paid in full.
“It’s a sight. In the past, we would see layaway start to pick up around Halloween” as people get a jump-start for Christmas, said David Travis, manager of a Kmart store in Conover, N.C.
Burlington Coat Factory Warehouse Corp. said its layaway business is stronger than a year ago. And e-Layaway.com, which offers online layaway services for about 1,000 merchants, has seen its business double from the same time last year. Customers are setting aside even $25 calculators and $30 backpacks.
The word “layaway” had more than double the interest among U.S. searchers in August than it had in August 2008, according to Google Insights for Search.
Retailers that don’t offer layaway are seeing financially strapped shoppers keep buying smaller amounts and using more cash than credit to pay.
