Insight: millennials are fastest growing spenders on grocery shopping
New figures have shown that millennial-led households are the fastest growing spenders on grocery shopping and are driving the growth of discounters.
The data from Nielsen Homescan found that while overall grocery spend in UK has grown by 2.7% year-on-year, spend among households where a 16 to 35 year old is the main shopper has increased by 7.9%. This compares to next fastest growing group of spenders, households led by people aged over 65, where spending rose by 3%.
The study found that the average millennial household with children now spends an extra £210 annually on groceries, while millennial households without children spend £113 extra.
“Millennials are freeing up more income to spend on groceries,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “This is mainly due to millennials shopping more frequently and continuing to buy more per trip. This is down to the increasing number of local store formats which suit their ‘top-up’ lifestyle – and can include spending more on food consumed outside the home – much more than the big weekly trip to a large out-of-town store.”
Nielsen Homescan’s figures show that historically, Asda’s has had the strongest appeal with millennials – especially millennial families who allocate 17.1% of their grocery spend to Asda compared to just 11.4% among the total population.
However, the study shows that millennials are increasingly allocating spend to the discounters and bargain stores. Millennial spend at Aldi has increased by 46% year-on-year compared to a 19% increase across all Aldi shoppers. Meanwhile, millennial spend at Lidl has risen by 28% which was nearly twice the rate across all shoppers.
Watkins added: “Although millennials, particularly families, have historically over-indexed on shopping at Asda, they’re now really driving the growth of the discounters.
“However, it’s important not to think of millennials as one homogenous group, for example, they’ve also increased spend dramatically at M&S which has a large price difference to the discounters due a different product assortment.”
The figures show that Aldi has been more successful at gaining the millennial pound in the north, capitalising on its stronger presence in locations where millennials live. However, Aldi under-performs in London compared to Lidl due to having fewer stores in millennial catchment areas. Despite Lidl’s better performance in London, its overall success is also being driven by regions less populated with millennials, such as Wales and the South West.
“The media, retailers and marketers tend to have a picture of millennials as London-based hipsters shopping at Wholefoods,” said Watkins. “However, they’re driving growth at Asda and the discounters and have an overly strong presence in the north. Retailers need to look beyond labels and understand actual behaviour if they want to appeal to this crucial group more successfully.”
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