Hispanics Consumer Spending Will Pass Millennials Within the Next Four Years
Hispanics are expected to top millennials in consumer spending by the year 2020.
Given current Hispanic growth in income and population trends, a new Morgan Stanley report estimates that Latinos will grow their "share of consumer wallet," also known as consumer spending by 1.6 percentage points over that time compared to a millennial growth clip of just 0.6 percent.
Consumer spending growth for whites over the age of 65 is expected to build by just 0.4 percent over the same period.
Hispanics Tops in "Income Progress"
Researchers also noted "income progress" among Hispanics topped all groups over a two-year period beginning in 2013, with such areas as food at home, apparel and health care expected to show even more growth.
"The aging of the population and the rise of millennials will continue to impact the consumer landscape over the next five years," the report detailed. "However, the share of consumer wallet controlled by the Hispanic population will experience the fastest of growth, driven by the addition of 8.2 million people -- or 52 percent of total U.S. population growth -- and above average per capita income growth."
The U.S. Census Bureau reports the Hispanic population swelled to 55.4 million in 2014, representing more than 17 percent of the country's total population. Data also shows by the year 2050, the Hispanic population will reach as high as 106 million.
Hispanics Rate as Youngest Ethnic Demographic
A Pew Research study also finds at a median age of 29, Hispanics are the youngest ethnic demographic. In all, nearly three out of every five Hispanics are millennials (between the ages of 18 and 34) or younger.
Millennials recently surpassed Baby Boomers as the largest U.S. population at 75.4 million. That number is expected to rise as high as 81.1 million over the next two decades.
"This could create a greater-than-expected long-term headwind for restaurant spending, but we think that 1) it will unfold over time, allowing restaurants to react, 2) we think the response will include a move toward greater convenience, growth in meals to go and investment in delivery, and 3) a large swath of brands, including many limited service brands, will be net beneficiaries of this rise in Hispanic population," the Morgan Stanley report noted.
SOURCE Latin Post