Insight Flash: Using CE proprietary demographic data, we explore senior spending and which discretionary spend categories have seen the fastest spend growth among older cohorts

With younger consumers facing mounting headwinds to their discretionary spending amid the resumption of student loan payments, stagnating wages, and rising interest rates, older shoppers have come to play an increasingly important role in supporting overall US consumption expenditure. As highlighted in a recent WSJ article, seniors (65+) are less vulnerable to macro headwinds than their younger counterparts given their reduced reliance on employment-related income, minimal family obligations, and tendency to own their homes outright – and in the post-COVID era, they have found themselves both flush with excess savings and increasingly motivated to splurge on products and experiences that cater to their active lifestyles. This senior spending trend is only expected to continue as the baby-boomer generation (the youngest of whom are now 59) continues to retire in droves.

Using CE’s US transaction data, we can break down domestic consumer spending by age group to better understand how senior spending is reshaping the consumer landscape, using our Cohort tools to identify discretionary categories that are garnering an outsized share of 65+ spend as well as individual companies that are best poised to benefit from this shift.

Discretionary Categories Attracting the Most Senior Spending

Not all sectors have benefited equally from older consumers’ robust spending. In the chart below, we compare 2023 YTD spend growth by shoppers aged 65+ to total spend growth in 10 key discretionary sectors.

The categories with the largest year-on-year growth among seniors are:

  1. Limited-service restaurants
  2. Travel
  3. Online retail
  4. Full-service restaurants
  5. Telecom/Media

Among these, Full-Service Restaurants is particularly notable for having the highest delta between senior and total spend growth (8% vs. 1%) and a relatively high percentage of overall industry spend derived from 65+ shoppers. Seniors’ spend grew faster than total spend in all but one of our discretionary sectors, as Leisure & Recreation total spend benefited from continued strong activity among the youngest cohorts (18 – 34). Using CE’s Cohort tools, customers can further explore performance by age, income, and other demographic variables for 25+ industries and 120+ subindustries, as well as thousands of individual brands.

Which brands are most exposed to older consumers?

To determine which companies may stand to gain the most from seniors’ healthy wallets, we looked at large brands* that are over-indexed to the 65+ Cohort within the top 5 discretionary categories above. The table below highlights the top 5 brands in each category with the highest percentages of their trailing 6-month CE panel sales coming from the oldest customer cohort, as measured by our “brand-to-panel index”** representing brands’ exposure to 65+ shoppers relative to their broader industry. Standout public companies include Qurate Retail (ticker: QRTEA) with two online retail platforms (HSN and QVC) nearly 5x more levered to the 65+ Cohort than the average brand in Online Retail – Broadlines, and Choice Hotels (ticker: CHH), whose brands Comfort Inn and Quality Inn are particularly favored by seniors.  Among privately-held companies, the restaurants Perkins, Captain D’s, and Long John Silvers attract larger numbers of older diners relative to peers. Using CE’s Demo and Geo Exposure tool, clients can screen a universe of 10,000 US brands by exposure to various demographic cuts to generate trade ideas.

Which brands are least exposed to older consumers?

We also explored brands in the same categories with minimal exposure to older shoppers. These brands are more reliant on younger cohorts and are likely to be impacted if economic challenges diminish those age groups’ ability to spend on discretionary products and services. The youngest-skewing companies include several new-economy household names such as Spotify, AirBnB, and Uber Eats, as well as discount airline Spirit Airways and popular restaurant chain Chipotle Mexican Grill (please see our recent Insights Flash Student Loan Payments May Serve an Unhappy Meal for an in-depth exploration of the potential impact of student loan repayments on the Limited Service Restaurant industry).

*This analysis includes only brands with more than 2,500 unique individual shoppers over the past 6 months. ** Calculated as: percent of brand sales from 65+ cohort divided by percent of industry sales from 65+ cohort.

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. Our data offers insights into not only demographics and cohorts but hundreds of industries, subindustries, tickers, and symbols across the globe. If you’d like to benefit from using Transact EUR or US or other products for other industry data year-round to track trends and dynamics like these, reach out to insights@consumeredge.com.

About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Matthew Volpe is an Insights Analyst for the CEIC. Follow him on LinkedIn.