Gen Z Cuts Spending in Face of Inflation

Rising prices are causing Gen Z to reduce spending and dine at home.

Over the past year, 73% of Gen Zers say that they’ve changed their spending habits due to increased prices, according to the Bank of America’s Better Money Habits survey.

These lifestyle changes include cooking at home more often instead of dining out (43%), spending less on clothes (40%) and limiting grocery purchases to essentials (33%). Nearly all those who adopted new spending habits plan to maintain them over the next year even as inflation slows, the survey showed.

Additionally, a third of Gen Z reported experiencing a financial setback, forcing them to either stop saving or accumulate more debt.

“Gen Zers are definitely looking for ways to improve their financial health,” Holly O’Neill, president of retail banking at Bank of America, told Reuters. “They are proactively making lifestyle changes to combat inflation.”

The generation is also feeling less confident in the economy as a whole, with 32% feeling confident the job market will improve, compared to 46% in 2021, and 26% confident the housing market will remain strong, compared to 32% in 2021.

While Gen Z may be cutting back on spending, older generations are spending more.

According to Bank of America data regarding credit and debit card spending per household, Gen Z spending declined by over 2% between May 2022 and May 2023, while spending increased by 2.5% (Boomers) and 5% (Traditionalists, those born prior to 1945).

“Consumer repayments still remain strong,” O’Neill added. “From a delinquency perspective, we are still not where we were pre-pandemic. Even though there has been a change in spending and payment behavior, the consumer is still very healthy.”

Read the article “Generation on the Rise” in NACS Magazine to understand Gen Z and what and how they want to buy in today’s economy.

Source: NACS

Here’s What Happened in Q1 at Independent C-Stores

May 23, 2023

Although fewer people are shopping at c-stores, revenue has not been impacted, according to Skupos data.

This article is brought to you by Skupos.

Skupos’ Q1 Independent Convenience Retail Trend Report. While revenue was up in the first quarter, weekly foot traffic was down 2.6%.

“This means that although fewer people are walking into convenience stores, revenue has been boosted by higher prices,” said Jake Bolling, the CEO and founder of Skupos, a technology and data platform that specializes in serving small-chain and independent convenience retailers.

Packaged beverages—a top in-store category for sales—was impacted by inflation and rising prices last year, which resulted in a decline in unit sales, according to Skupos data. While unit sales were down, packaged beverages still posted strong revenue. Energy drinks, carbonated soft drinks and sports drinks were the main drivers of the category. When combined, these three subcategories made up more than $1.1 billion in independent retail dollar sales.

Additionally, Skupos found that promotional and pricing strategies vary by region. For example, the South Central region has the highest average price for a 20-ounce carbonated soft drink at $2.23; however, the region has the lowest promotional take rate (percent of units sold on discount) at 7%. Conversely, the West region has the highest promotional take rate at 39% and the second highest average selling price at $2.14, meaning that pre-discount prices in this region are generally much higher.

Skupos’ data is powered by scan data from over 15,000 retailers, and the company has created the largest network of small chain and independent convenience retailers in the country, serving as a single platform to measure and improve product performance across thousands of stores.

“Our technology helps brands sell smarter because they have a bird’s-eye view of how each of their products are selling in a market they haven’t previously had visibility into,” said Bolling. “When brands harness the power of data, they can make informed decisions and optimize their strategy across the hard-to-access independent market.”

Source: NACS