Gen Z Cuts Back on Consumption

Gen Z has run out of money this year, resulting in decreased spending across various retail, product, and service categories.

The Big Picture: There’s nothing more desirable to brands than young consumers — the generation that drives trends and builds lifelong customers. When they stop spending, it can have a ripple effect across culture.

Behind the Curtain: Gen Z’s new motto may be, “murky job prospects, empty wallets, can’t spend.”

• Market research firm Circana reports that in-store and online purchases for 18-to-24-year-olds fell 13% year-over-year between January and April.
• Wells Fargo found that the hardest-hit categories are apparel, accessories, tech, and small appliances.
• Credit card delinquencies have also hit their highest rates for 18-to-29-year-olds since before the pandemic, per the New York Federal Reserve.

Closing Thoughts: Due to the cash-and-credit crunch and endless rounds of layoffs, several people who spoke with WSJ say they’ve cut back on streaming subscriptions or even eating three meals a day. They’re also not hitting the town on a Friday night as much as they used to, opting instead for gathering with friends at home and ordering takeout. It’s the diet version of recreation.

Prediction: Austerity might become the coolest thing among Gen Zers… and brands that offer high-quality, communal experiences at bargain prices may find a generation of excited customers.