Can malls really rely on millennials' spend on leisure and eating out?
Big shopping mall owners are apparently looking to millennials' spending on leisure and eating out as a major source of future success, because, as well all know, they spend a lot in these areas and are into 'experiences' rather than buying things. Of course we know this, because it is the current received wisdom, isn't it?
Only it's not true. Looking at the share of their budgets devoted to areas like restaurant and café meals and sports, gyms, cinemas, theatre etc., it is actually lower for the under-30 households than for other age groups. Their disposable spending power has been crushed by rising housing and education costs. Only in communication – led by outlays on smartphones – do they spend a greater share than average, and that only marginally. In fact, for recreation and culture, a broad category including everything from leisure activities to package holidays, they spend a very much smaller share (by 6.2 percentage points) of their budgets.
So the point is, while millennials may like malls as a physical shopping destination, and leisure and eating may be increasing their share of this age group's spending while they are there, it does not follow that this is the best and biggest opportunity for mall owners to be chasing, in comparison with expenditure with other age groups in this area, which, in contrast is both large and rapidly-growing.
So, please, mall owners, think again, because you may be heading down a millennial-inspired cul-de-sac.