The Inflation generations consumption data is here!
How does inflation affect consumption by generations: boomers save more on energy, millennials and Z cancel vacations and Generation X cuts back on transportation?
Tell me when you were born and I'll tell you how inflation affects you. The price escalation has set the economy on fire, and the pockets of Spaniards are burning (although some more than others).
In July, the shopping basket became more expensive by 10.8% and already adds half a year of sky-high prices. The same increase has not been seen in Spain since the oil crisis, in the mid-80s. And although the blow is widespread, the way to stand up varies depending on the generations.
The baby boom generation, for example, born between 1950 and 1965, are the most concerned about the price escalation, according to a report published by the consulting firm McKinsey & Company on the impact of inflation and war on consumer trends in Spain. (It should be borne in mind that the ranges dividing the generations are approximate and are subject to debate.)
57% of baby boomers are concerned about inflationary pressures, being the collective experience greater concern, compared to 56% of generation X (1966-1979), 52% of millennials (1980-1994), and 54% of generation Z (1995-2010).
Inflation generations consumption
Boomers are also, along with Generation X, the most pessimistic when it comes to assessing the situation of the Spanish economy. 68% of Respondents are negative about the prospects, followed by 60% of baby boomers, 57% of millennials and 42% of zentennials.
On the other hand, the youngest express greater concern about the unemployment situation: 64% of the young people of Generation Z place unemployment as their greatest concern.
No wonder, currently, almost 30% of those under 25 are unemployed, and that despite the intense job creation in recent months, and that the general unemployment rate is currently at 12.5%.
The difference with previous generations could be summarized in that, for inflation to worry you, you first need to have a salary.
Moreover, taking into account that the youngest of Generation Z is currently around 12 years old, and that 64.5% of those under 34 still live with their parents, it is likely that many of the concerns or lack of reaction reflected in the survey data have been transferred to a greater concern of parents, from previous generations.
"In Spain, consumers are more worried about rising prices, unemployment and the invasion of Ukraine. Their views on the current and future state of the economy remain pessimistic, at a level comparable to the attitudes of the first months of the COVID-19 pandemic," they point out from McKinsey.
As prices rose, they explain from the consultancy, "spending on food and gasoline soared."
Inflation generations consumption data
Basic necessities (fuel and food) were precisely those that became more expensive, which caused consumers to "cut the money destined to savings and spend less on non-essential products," they add.
By generations, boomers are the most aware of the need to save energy, with 63% of respondents. Millennials and zentennials, on the other hand, admit that they have had to cancel their vacations to cut expenses, while Generation X is more inclined to make cuts in their mode of transport.
78% of boomers and xennials are worried that the price of everyday products is constantly rising, compared to 75% of millennials and 67% of zentennials.
Accordingly, there are already many who plan to react by buying fewer products. However, when it comes to cuts, millennials are in the lead: 57% consider tightening their belts if prices continue to rise, compared to 55% of Generation X, 52% of baby boomers and 50% of Generation Z.
Another alternative to deal with inflationary pressures is to buy cheaper products. "Of the 80% of consumers who have assumed new purchasing behaviors in the last three months in search of good value for money, more than half tried white brands," the report notes.
Inflation generations consumption statements
"The change in the retailers visited and in the brands is evident, and the main drivers of the choice are prices and value for money. However, 39% of consumers say they plan to splurge in 2022," adds the consultancy.
55% of zentennials plan to splurge in 2022, and 62% plan to try some new private label, the highest figure among the generations. The predisposition to "splurge" decreases as age increases: with 48% of millennials, 38% of Generation X and 24% of the baby boomer generation.
Meanwhile, 45% of boomers and Generation Z plan to lower their standard of living due to rising prices, a percentage that is close to half in the case of millennials and xennials (47% in both).
Inflation generations consumption summary
- The baby boomer generation is the most concerned about the price escalation, while the concerns of the youngest are related to unemployment. In order for you to worry about inflation, you first need to have a salary.
- 57% of millennials will tighten their belts in 2022 if prices continue to rise, while 55% of Gen Z plan to splurge this year.
