In light of escalating living costs and a complex economic backdrop in the U.S., a recent survey delved into the financial dispositions and actions of Gen Zer individuals.
The 2023 Better Money Habits study conducted by Bank Of America provides a lens into how this demographic is grappling with its economic realities amid persistent inflation and altering economic conditions.
Adaptive Lifestyle Shifts - Cutting Corners To Meet Ends
A substantial 73% of respondents have reportedly adjusted their spending habits to economize on essentials like groceries and fuel in response to inflationary pressure.
A striking 96% of these pragmatic spenders said they foresee these adjustments continuing over the ensuing 12 months, indicating a more long-term change in their economic behaviors and spending patterns.
Gen Z Eyes Practical Spending Decisions
Additionally, 43% of Gen Zers said they have cooked at home more rather than dine out, with 90% saying they planned to maintain this approach through the upcoming year.
Here, we look at three companies that may face the brunt of the lackluster trend:
McDonald's Corporation MCD, which has been a popular food hub for young Americans, plunged 14.7% in the last six months. On Oct. 11, Morgan Stanley analyst John Glass cut the price target of MCD to $315 from $330.
Starbucks Corporation SBUX - American teens just can't get enough of the coffee chain. However, the share price movement of SBUX has been bearish, likely because of the current macro scenario of rising costs. Shares of SBUX fell 14.88% in the last six months. On Oct. 12, UBS analyst Dennis Geiger lowered the price target of SBUX to $100 from $110.
Chipotle Mexican Grill, Inc.'s CMG burritos, bowls, quesadillas, tacos and salads could be losing their appeal among young Americans. Stephens & Co. analyst Joshua Long lowered the price target of CMG to $2330.00 from $2400. Shares of CMG have been heavily battered in the last month, falling nearly 8%.
Gen Z Trimming Clothing Expenses
Clothing expenses are also trending downward among young Americans, with 40% of Gen Zers saying they curtailed their spending and 79% anticipating that they would maintain this change for the next year, according to the study.
Nike, Inc. NKE shares fell nearly 20.7% in the last six months. The athletic footwear and apparel company's North American sales were down about 2% year-over-year in the first quarter reported last month.
American retailer of athletic footwear and sportswear Foot Locker, Inc. FL plummeted 47.59% in the last six months.
Grocery Shopping - Gen Z's Focus On Essential Items Only
Gen Z's caution around expenses extends to groceries as well, with 33% of respondents saying they restricted their purchases to essential items and 79% planning to maintain this change through next year.
Retail giants like Walmart Inc. WMT, Caseys General Stores, Inc. CASY and Kroger Company KR may bear the brunt of this trend. Shares of Walmart fell 3.28% in one month, while those of Caseys and Kroger were down by 4.81% and 3.56% over the same time frame.
Gen Z Faces Financial Setbacks
Roughly 40% of Gen Z respondents said they encountered a financial challenge in the past year, compelling them to either halt savings or accrue additional debt. Furthermore, a prevailing sentiment of economic pessimism is evident, with a majority expressing skepticism regarding substantial improvements in economic conditions in the upcoming year, according to the survey.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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