The power of the youth market

June 6, 2006
By Carolyn Leitch

The most hidden demographic story in the U.S. economy, according to David Rosenberg, is Generation Y and the group's emergence as a powerful force in the shopping malls and fast food restaurants of America.

Mr. Rosenberg, chief North American economist for Merrill Lynch & Co. Inc., notes that one piece of research after another highlights the aging population profile and the implications for health care, retirement homes, lifestyle communities, leisure and travel and the like.

But after conducting his own informal survey in the financial world, he found no one who knew that there are actually more teens and "tweens" than seniors.

Mr. Rosenberg points out that people in the 10-to-19 age group number 42 million in the United States, compared with 37 million of those 65 and older.

Mr. Rosenberg says that people in the younger group are active consumers and quite sophisticated in terms of their shopping selection. They're also the second-largest market of consumers in the Group of Seven leading industrialized nations today.

They currently spend about $120-billion (U.S.) annually and the growth rate in their spending is running at about 4 per cent a year.

Mr. Rosenberg adds that demographers say these kids are "getting older younger," meaning they become as acquisitive as adults at younger and younger ages.

As for what they like to spend money on, favourite purchases are clothes, music, electronics, video games, jewellery, entertainment, fast food, soft drinks, cosmetics and magazines.

Investors looking for themes should think about education, the economist says, because almost 90 per cent of 17-year-olds today plan to attend college or university.

He adds that the Hispanic/Latino "tween" market is growing the fastest -- at about six times the rate of the overall market.

Source: The Globe and Mail