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NATIONAL REPORT — Although convenience store operators are eager to embrace millennial consumers, it is still the Baby Boom generation that plays the dominant role in the U.S. economy, controlling 70 percent of the nation’s disposable income.
Born between 1946 and 1964, this valuable age cohort accounts for nearly $230 billion, or 55 percent, of consumer packaged goods sales, according to New York-based Nielsen.
And it’s no secret that between 2012 and 2050, the United States will experience significant growth in its older population. The U.S. population aged 65 and older is projected to reach 83.7 million in 2050, almost doubling its estimated population of 43.1 million in 2012, according to a 2014 U.S. Census Report, An Aging Nation: The Older Population in the United States.
Baby boomers are largely responsible for this increase, as the leading edge of this generation began turning 65 in 2011, the Census report noted.
“Given its sheer size and economic clout, the 50-and-older demographic will remain the dominant and most influential consumer group for years to come,” said Deborah Weinswig, executive director/head of global retail and research for Fung Business Intelligence Centre (FBIC), a Hong Kong-based market data firm. “Forward-minded companies are rethinking the tired presumptions about older customers and finding new and lucrative ways to reach them.”
A recent FBIC study revealed that younger boomers outspend millennials by nearly $8,000 annually and the typical consumer by $5,000, with spending occurring across most categories. Boomers will control more than half of all dollars spent on grocery foods in 2015, with a particular focus on health and wellness.
Baby Boomers at the Pump
The significance of older consumers to the c-store industry is not lost on NACS, the Association for Convenience and Fuel Retailing. “You have close to 160 million people a day in convenience stores, at the pump or in the stores,” said Jeff Lenard, vice president of strategic industry initiatives for the trade group. “That‘s half the country and if you ignore any segment, you do it at your own peril.”
As proof of baby boomers’ relevance, Lenard pointed to a recent Fuel Institute study, Driver Demographics: The American Population’s Effect on Vehicle Travel and Fuel Demand, which found boomers are offsetting the decline in millennials’ driving. Baby boomer drivers are experiencing the highest driver licensing and vehicle travel rates in history, according to the report.
“While everyone wants the younger consumer, there’s a bit of a concern that they might not be driving as much,” Lenard said. “The only group that is seeing an increase in driver registration is older drivers. We’re at a record low of teens who have their driver’s licenses.”
In addition to the frequency of baby boomers’ c-store and gas station visits, Lenard observed that operators would be wise to appeal to older consumers given their high levels of community involvement. He noted that older residents are more likely to attend the many zoning hearings required when c-store operators wish to build or change the use of their existing locations.
“If [members of] the older demographic [group] see that you have all the things in your store that they want in their area, they will be more likely to work with you than against you,” Lenard said. “They may have grown up there. They have more free time. They treasure their community.”