OMG! Teens Slash Clothing Spending
A bigger surprise, however, is that they are actually spending more on shoes -- a 9% increase, according to the 17th semiannual survey, and 8% more on accessories. In fact, shoes are hot: "Footwear posted the strongest year-over-year and sequential results at a 4% and 21% gain respectively," the Minneapolis-based brokerage firms says in its report -- "an indication that the strong footwear cycle, particularly relative to the weakness in apparel, continues for the youth demographic."
Overall, teen spending fell 14%. "The decrease in spending leads us to believe that the economy is forcing parents and teens to cut back on spending across the board," the report adds. "Teens and their parents are still buying new clothes, footwear and accessories, but are more selective and increasingly price-conscious. This will force retailers to discount prices and offer unique promotions to keep a steady flow of spending until the economy improves."
A bit of good news was that among parents, who were also surveyed, the spending decline seems to have stabilized, and 2009 spring levels appear to be slightly ahead of last year. In this survey, parents say they spend $915 on clothes for their teens annually. And while that has dropped from $1,085 last fall, it's also above the $883 average in the survey last spring.
For teen girls, Hollister took the "most preferred" position, while boys' favorites are a category the brokerage firm calls West Coast brands, with skateboard-oriented names like Pacific Sunwear, Volcom, Quicksilver, and Zumiez. Nike, Forever 21, and American Eagle are also popular.
Video games continue to dominate teens' wallets, and now account for 8% of teen budgets, compared with 3% five years ago. (In fact, 59% of those surveyed own two consoles.) GameStop continues to be the leader, with its popular trade-in policy helping it gain a 31% share among teens.
In electronics, Apple strengthened its hold on teens -- 86% of teens with an MP3 player have an iPod, up from 84% last fall. And while just 8% currently own an iPhone (up from 6% in the previous survey), 16% say they plan to buy one in the next six months.
In restaurants, Starbucks retained its No. 1 spot, with the survey also indicating that value brands -- such as Chipotle and McDonald's -- are gaining share.