Inconspicuous Consumption

American Demographics, April 1, 2002

As Boomers begin empty-nesting, Balzer believes that restaurant spending will increase, particularly at places that offer fast, casual and reasonably priced fare. "When the kids are gone, people go out to eat again," says Balzer. "So look for new chains that offer a fast-food experience appealing to empty-nesters."

But even if Americans dig deeper into their pockets for beer and takeout, the overall declining share of spending on food will likely continue. It's the lasting legacy of greater production efficiencies and more competition - from gas stations to big-box merchandisers. Says FMI's Jones: "American consumers get the best value for their food dollar of anyone in the world."

No category experienced a greater decline in spending than apparel, with a budget share that dropped by 14 percent. While Americans of all ages reduced their spending on clothing, those over age 55 cut back the most, earmarking only 4 percent of their total expenditure for threads. Candace Corlett, a principal analyst at WSL Strategic Retail, a marketing and retailing consultancy in New York, faults retailers for ignoring older customers.

"A lot of young marketers have entrenched stereotypes that people over age 50 act like 90-year-olds," she says. "They seem to think that someone waking up on their 50th birthday suddenly loses any sense of style and switches from fine fabrics to polyester."

Among younger age groups, the drop in clothing expenditure reflects more casual attitudes toward fashion. In the 1990s, fashionistas deemed it acceptable to mix and match pricey fashions with discount rags. "It became OK to have a Gucci bag with a $20 raincoat from Target," says Corlett. "You could get your T-shirts at the Gap and cashmere sweaters from Bergdorf." The bottom line for such eclecticism was lower clothing bills.

That trend also reflects a values shift in which people are less brand-conscious and more time-pressed. Today, working couples who have less time to shop are looking for convenience and value when they go shopping. "Boomers don't care what pair of khakis they buy as long as it has the best price," says Marshal Cohen, president of NPD Fashionworld, an online division of the NPD Group. "As for the Gen Ys, they'd rather have the coolest electronics than the coolest clothes," he says. Such changing priorities have helped discounters like Target and Wal-Mart, while hurting specialty stores like Gap and Abercrombie & Fitch. As Cohen observes: "Apparel used to be about image. Now it's about function."

Over the next decade, that thinking may change. The bursting of the dot-com bubble may mean that Gen Ys will end up reporting to more formal workplaces a la suit-filled Bush White House. But WSL's Corlett doubts that the next decade will mark a complete revival of heel-and-tie office fashion. "You'd have to drag people kicking and screaming back to formal dress," she says. "What's more likely to occur is the up-shifting of 'business casual' rules to more 'professional casual.'"