According to new data from NIQ, Generation X may only account for one-fifth of the U.S. population, but within the next year, they’ll be the market’s biggest spenders.
Globally, Gen X consumer spending has surpassed other generations and is expected to reach $15.2 trillion ($5 trillion in the U.S.), with projected growth of $23 trillion by 2035 ($7 trillion in the U.S.), according to a World Data Lab and NIQ report, “The X Factor.”
“Gen X has more spending power than baby boomers did when they were their age,” said World Data Lab CEO Wolfgang Fengler during the NACS Show Education Session, “Gen X: The Spending Force You’re Overlooking.” “If brands and convenience stores don’t focus on Gen X, they’ll lose the biggest slice of the pie,” he added.
Gen Xers (ages 45–60) are in their prime earning and spending years and are a high-earning generation (Numerator noted that the average Gen X income is more than $125,000 annually). Many are also caring for children at home or in college as well as aging parents, all of whom they financially support directly or indirectly. Fengler said many Gen Xers are often functioning as the “CFOs of three generations.”
Recently released data from Numerator also showed that Gen X is a significant spending force, with a 34% share of spend in the U.S.’s CPG, general merchandise and QSR segments—“the highest of any generation,” Numerator said.
Numerator data shows that the average Gen X household spends $25,468 (CPG, general merchandise and QSR spend) annually in stores, making around 824 shopping trips per year and spending $31 per trip.
In the next five years, Fengler predicts that Gen X will spend approximately $502 billion globally on food and packaged beverages and $47 billion on alcoholic beverages and tobacco—$29 billion and $22.9 billion in the United States, respectively.
“They [Gen Xers] will be the ones most likely to walk into convenience stores in the next 12 months, so it’s the right time to reap the benefits,” said Fengler. “If c-stores, especially specialized ones, can respond to this shift, there are increased opportunities to capture new spending.”
During the NACS Show Education Session, Fengler noted that Gen X has a lot of pressure on wallets, so they don’t take their discretionary spending lightly. These individuals value premiumization: quality, value and convenience over quantity and generality.
Fengler noted several projected trends specific to Gen Xers:
- Increased spending on fish/seafood and overall health foods, which are the biggest categories with above-average growth.
- Reduced spending on soft drinks and packaged food products, as these categories are experiencing below-average growth.
- Disproportionately, they’re willing to pay more for travel, recreation and transportation. For convenience stores, these activities could translate to a higher spend on inside merchandise and fuel.