Gen Z Spending More on Coffee and Travel in Sign of ‘Little Treat Economy’
Summary
Young consumers from Generation Z, aged roughly 11 to 27, are spending more on small treats like coffee and pastries as well as bigger expenses like travel and dining out. This spending trend continues despite their concerns about money and the economy, and experts call it the “little treat economy.”Key Facts
- Generation Z includes people born between 1997 and 2012.
- Gen Z is buying small indulgences such as coffee, beauty products, and jewelry frequently.
- They are also spending more on travel and eating out compared to other age groups.
- This pattern is called the “little treat economy,” which means spending on small pleasures even during tough financial times.
- Research shows many young people use these small treats to help cope with stress or because they cannot afford larger purchases.
- A Bank of America study found Gen Z leads growth in restaurant spending, possibly due to slower price increases in restaurants and rising grocery costs.
- Some experts say these habits reflect Gen Z’s desire to enjoy life despite economic challenges, rather than being the cause of their financial difficulties.
- The “little treat economy” is compared to the “lipstick effect,” an older idea where consumers buy small luxuries during hard times for emotional comfort.
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