April 14th 2024.
According to a recent report by McKinsey & Company, it seems that millennials and Gen-Z individuals have made groceries a top priority when it comes to spending their hard-earned money. The report, which surveyed participants from various generations, including baby boomers and Gen-Zers, revealed that groceries have surpassed other popular categories such as travel, personal care and beauty, restaurants, apparel, and fitness.
This trend has been evident since 2018, when the older generations, namely baby boomers and Gen-Xers, were found to be spending more on groceries than millennials. However, the shift in spending habits among millennials is not solely due to new parenthood, as many may assume. It appears that a significant factor driving this change is a greater focus on health. The average consumer now anticipates spending more on fresh produce, meat, dairy, and even shelf-stable and frozen foods.
This change in spending is also reflected in the shopping habits of millennials, as one female participant from Ohio shared, "We've been making more trips to the grocery store to purchase healthier options." She also added that this has allowed her and her family to not only save money but also spend quality time together cooking and eating meals.
Interestingly, it seems that Gen-Z individuals are willing to splurge on groceries, especially when it comes to high-quality snacks and beverages. Brands like Liquid Death, a canned water brand, have become increasingly popular among this generation. One Gen-Z shopper even admitted that their grocery bill has increased due to their love for "fancy sodas and drinks."
The report also noted that fewer consumers are switching to lower-priced retailers and brands. This could be attributed to the rise of "buy now, pay later" services, which allow individuals to make purchases without immediate payment. As one female Gen-Z shopper from Arizona shared, "I plan to treat myself every now and then, whether it's buying new makeup, clothes for the new season, or even traveling to try new foods. It's important to have a healthy balance and indulging a little helps me enjoy life more."
Despite the push for healthier eating, it appears that millennials are still consuming meat at increasing levels. According to Supermarket News, they spend an average of $17 per purchase, with Gen-Xers accounting for 32% of sales and baby boomers being the most frequent meat purchasers at 53 times per year.
However, all generations are feeling the impact of grocery inflation. According to a Moody report, the average American household now needs to spend an extra $445 per month to purchase the same goods and services as in 2023. This could explain why celebrities like Offset are stepping in to help, as he recently donated $30,000 in groceries and gift cards to high school students in Baltimore.
Overall, it's clear that groceries have become a top spending priority for millennials and Gen-Z, driven by a focus on health and a willingness to splurge on quality products. As grocery inflation continues to rise, it's important for individuals to find a healthy balance in their spending habits and take advantage of services that can help ease the financial burden.
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