A Decade of Consumption Rings in Restrained
The 2000 Consumer Expenditure Survey found that the 1990s were a decade of less flash and more cash for life’s necessities than some may have thought previously. Tracking the Consumer Expenditure Survey (CEX) reveals how shifting tastes and changing demographics are transforming the way consumers spend, according to the April 2002 issue of American Demographics.
- The biggest factor influencing spending, according to John Rogers supervisory
economist of the CEX, is a consumer’s age. In the 1990s, it was Baby Boomers
between the ages of 45 and 54 — the peak earning years for Americans — who
proved most influential. Over the course of the decade, these older Boomers
increased their share of aggregate spending by 22 percent, to one trillion
dollars. Their dominant numbers helped increase total spending on health insurance
and drugs, education and housing.
- Consumer spending on food dropped 10 percent between 1990 and 2000. In fact,
food prices have risen more slowly than household income for decades. So people
in 2000 spent proportionately less on food than in 1990 and still got more
for their money.
- Surprisingly, consumers spent proportionately less on food eaten away from
home — a counterintuitive finding given the increasing number of busy, dual-income
couples. But experts report that discount-happy diners are clipping coupons
and scouting for values to lower their restaurant tabs. “Consumers today are
much more cautious about what they’re buying,” says Britt Beemer of America’s
Research Group. “They look for two-for-one specials and more discounted items.”
Whereas customers once spent $20 for an entree, notes Beemer, they’re more
likely to spend $10 for half an entree or an expanded appetizer. Restaurant
coupons, once limited to pizza joints, now show up in white tablecloth establishments.
- In the future, demographics may alter food trends in yet different directions.
Spending on dairy products, for example, which dropped 18 percent between
1990 and 2000, should rise over the next decade as Gen Y begins buying milk
for growing families. Ditto for alcohol, as this cohort reaches its prime
- The study predicts that 10 years from now, Baby Boomers on the eve of retirement will be increasing their spending on health care, home remodeling and more elegant takeout than burgers and fries. Their children, Generation Y, will be in the mid-20s nesting phase, acquiring cars, buying new homes and furnishing their rooms with lamps and love seats. The growing number of Hispanics and other ethnic groups will mean larger family budgets devoted to children’s clothes, imported food and entertainment with a foreign beat.
Moderator Comment: What current view on consumer shopping
will differ from the results of the 2010 Consumer Expenditures Study?
According to the American Demographics article,
the perception of consumers spending big on electronic toys and meals away from
home in the nineties was erroneous (or exaggerated at least). Turns out that,
the nineties were more about consumers looking for bargains and “chances to
get more while spending less.” [George
Anderson – Moderator]