- Grocery shopping is the hottest new splurge category for Gen Z and millennials.
- Younger generations spend more on groceries than other categories, according to McKinsey.
- At the same time, inflation affects all generations, leading to increased grocery spending.
It used to be that splurging meant spending money on busy restaurants, expensive vacations, and designer clothes. Today, he has succumbed to a more humble category.
Groceries are becoming a top spending priority for younger generations, according to a February report from McKinsey & Company.
The company surveyed more than 4,000 people, from baby boomers to Gen Xers, about the categories they plan to splurge on this year. Grocery ranked highest among millennials and Gen Z, ahead of restaurants, bars, travel, beauty and personal care, clothing and fitness.
Millennials are also becoming parents for the first time. This means they spend on themselves, on their partners and on their children. This is a notable change from 2018, when older generations like Baby Boomers and Gen X spent even more on groceries than Millennials.
Gen Z, on the other hand, says the money they choose to spend on high-quality snacks and drinks leads to expensive grocery bills.
A 23-year-old General Zer told Business Insider via text message that he spent about $130 for a week and a half on groceries. “Fancy sodas and drinks” and “random snacks at Trader Joe’s” make up the bulk of the bill. He also said he spent about $35 on protein bars.
The success of canned water brand Liquid Death also shows how much young people are willing to spend on flashy food and drinks. The brand recently soared to a valuation of $1.4 billion thanks to a recent round of funding, according to Forbes. Peter Pham, an investor in Liquid Death, previously told Business Insider that part of the brand’s success comes from its appeal to younger generations.
“The healthy food and beverage industry has historically been a stale category filled with boring brands,” Pham told BI. “This creates a flashpoint moment for disruptive brands that know how to tap into culture and speak to Gen Z and digital natives.”
Regardless of their preferences, all generations are feeling the effects of inflation in grocery stores. Everyone is spending more than in previous years. The typical American household now has to spend $445 more on groceries per month to buy the same amount of goods it did a year ago, according to a Moody’s report.
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