• by Jack Loechner , Staff Writer @mp_research, November 6, 2002

Who's Buying What?

While doing some in depth probing about the age influence in the marketplace, interesting, and significant, data popped out that is of value in planning for market segmentation either by products or by consumers. NewStrategist provides valuable breakdowns in their latest report, New Generations.

Spending is directly linked to lifestage. Although the spending of middle-aged householders has always been above average thanks to their higher incomes, the importance of the middle-aged is greater than ever because their ranks have swelled with the large Baby-Boom generation. Boomer householders, now essentially filling the 35-to-54 age group, control more than half of the nation’s total household spending. In some categories, however, the middle-aged are less important than other age groups. Health care spending is dominated by the elderly. Generation Xers are now the most important customers for products and services required by infants and young children.

Regardless of age, the largest expenditure for the average household is housing, ranging from a low of 31 percent of spending for householders aged 45 to 54, to 35 percent of spending for householders aged 75 or older. While transportation accounts for 23 percent of spending by householders under age 25, it accounts for only 13 percent of spending by those aged 75 or older.

The youngest householders spend a larger share of their budget on food away from home than older households. Seven percent of the budget of householders under age 25 is devoted to food away from home compared with less than 6 percent for older householders.

Market Share of Spending by Age, 2000

	< 25	25 to 34	35 to 44	45 to 54	55 to 64	total > 65	65 to 74	75+
Number of consumer units	7.6%	17.3%	21.9%	20.0%	12.9%	20.3%	10.5%	9.7%
Average annual spending	4.5	17.7	26.0	24.3	13.4	14.1	8.5	5.6
Food	4.7	17.6	25.9	24.4	13.0	14.3	8.5	5.8
Alcoholic beverages	8.0	20.0	24.8	22.4	12.9	11.5	7.4	4.0
Housing	4.4	18.3	26.9	23.0	13.0	14.4	8.3	6.1
Apparel and services	5.8	19.2	27.4	25.6	11.8	10.1	6.4	3.7
Transportation	5.3	19.5	25.7	23.8	13.7	12.0	8.2	3.8
Health care	1.9	10.5	18.8	21.3	15.7	31.8	16.2	15.7
Entertainment	4.4	17.4	29.0	24.0	13.6	11.6	7.9	3.7
Personal care products And services	4.6	17.6	25.0	24.2	13.1	15.3	9.0	6.3
Reading	3.0	14.0	22.7	24.4	15.9	20.5	12.0	8.5
Education	15.1	16.0	21.3	36.3	7.8	3.5	2.5	1.0
Tobacco products and Smoking supplies	5.6	16.8	29.4	23.6	14.2	10.4	7.4	3.0
Miscellaneous	3.2	17.9	24.1	23.9	13.7	17.3	10.3	6.9
Cash contributions	1.2	9.4	18.5	25.8	14.1	31.1	17.9	13.2
Personal insurance And pensions	2.7	18.5	29.8	28.5	14.8	5.7	4.3	1.3
Personal taxes	2.3	15.7	27.3	30.4	16.6	8.6	6.1	2.5
Gifts**	4.2	11.4	20.3	31.8	16.1	16.2	9.4	6.8

* This figure does not include the amount paid for mortgage principle, which is considered an asset.
** Spending on gifts is also included in the preceding product and service categories. Food spending, for example, includes the amount spent on gifts of food.
Note: The Bureau of Labor Statistics uses consumer unit rather than household as the sampling unit in the Consumer Expenditure Survey. For the definition of consumer unit, see the glossary.
(–) means sample is too small to make a reliable estimate.
Source: Calculations by the author based on Bureau of Labor Statistics data from the 2000 Consumer Expenditure Survey, Internet site http://www.bls.gov/cex/

AMERICAN GENERATIONS, 2003 NEW STRATEGIST PUBLICATIONS, INC.