The spending outlook through the back-to-school and holiday seasons is looking more positive as Gen X shoppers sustained a pickup in spending confidence for a second month in a row.
The improving spending sentiment among Gen X is key because they represent the largest spending generation and have the most school-age children.
Tempering the outlook are Millennials, who did not follow a prior-month surge with a strong August the way Gen X did. Meanwhile, Boomer confidence leveled off for a second month, which also will temper the outlook to a lesser extent.
The confidence gains will favor e-commerce over store sales (see the related report here)—with benefits also skewed toward clothing, and health and beauty among discretionary retail goods categories:
- Clothing, health & beauty. Confidence to spend in these categories saw the biggest month-to-month gains led by Gen X in August. Millennials also showed stronger confidence to spend in these categories despite flat Millennial sentiment in other categories.
- Electronics & leisure goods. Millennials are the key segment holding back spending plans in these categories. Gen X represent the best opportunity in electronics and leisure goods (which include sporting goods, toys, music, and videos).
- Homegoods. Homegoods are taking the brunt of waning confidence gains among Boomers. Their spending plans in homegoods categories declined in August, but where roughly offset by modestly better spending plans by Gen X and Millennials in the categories.
- Food & grocery. Except for Gen X, spending plans are flat among all other generations in food and grocery. Price sensitivity among core older shoppers will remain a drag on these categories.
These are among the takeaways from data through August from the Spending Confidence Index™, which is the proprietary index of consumer sentiment created by MacroSavvy™ based on data from Prosper Insights and Analytics™.
For more background about the Spending Confidence Index™ and its components, the white paper at this link explains why the new index is an improvement over existing measures of confidence.
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