Millennials opt for convenience

"Young people save a heck of a lot more than previous generations." Economist Mieke Welvaert

Economist Mieke Welvaert, 28, says her friends often have someone else cook dinner for them.

Whether that’s eating out at a cafe or restaurant, or getting Uber Eats delivered, no-one is too worried about spending a bit of money for the convenience of having dinner taken care of.

A new report shows it’s not just Wellington foodies like her who are splashing out on dining out.

Marketview analysed the behaviour of consumers aged 25 to 29 and found their spending had increased by 56 per cent over the past eight years. A lot of that was due to increased spending on food.

Welvaert said young people’s standard of living had improved.

‘‘It is possible that millennials have become accustomed to what they had growing up and our parents most likely were able to provide more for us than what they had in their childhoods.

‘‘As a result, millennials’ expectations for their standard of living are probably higher.’’

In 2017, millennials spent more on takeaways than they did at clothing, footwear, health, beauty, pharmacy and cosmetic stores combined.

Welvaert said access to credit and easier access to spending it – such as on a smartphone – could mean people would spend more.

Marketview data bears that out, showing a strong preference for online shopping. Millennial spending growth for nearly all online categories outstripped their bricks-and-mortar equivalents.

Since 2009, young consumers have more than tripled the amount they spend online, now allocating 10 per cent of their spending budgets to online purchases.

Popular online categories for millennials were fashion, accommodation, and increasingly groceries and food, encouraged by convenience and growing availability.

Marketview managing director Stephen Bridle said: ‘‘As young people increasingly turn to online options for their everyday shopping needs, the concept of the CBD and ‘high street’ is becoming somewhat redundant, at least to them … [M]illennials are breathing life back into the ‘local village’, bringing business back to their communities as they go out for coffee, drinks and dinner in their local neighbourhoods.’’

He said retailers should not underestimate millennials.

‘‘Retailers need to pay attention to the preferences and spending patterns of this generation if they want to profit from what is a highly valuable group of consumers, and not be left behind.’’

Financial adviser Tim Fairbrother said lax budgeting was not just the domain of millennials.

‘‘Lifestyle inflation is a big issue for Kiwis when the economy has been booming for six years; those that are not planning will have a rude awakening soon.’’

Welvaert said young people deserved some credit, too. ‘‘No matter how much more we spend, young people save a heck of a lot more than previous generations.’’

Work from Treasury last year showed successive generations of households appeared to be saving at significantly higher rates than earlier ones did at the same age.

It said this might be a precautionary response to higher unemployment and the possibility of less generous welfare systems.