Today’s cost of living increase for Social Security is the highest in 40 years. With recent inflation hitting those on a fixed income particularly hard, such a large increase is likely to provide much-needed relief to senior citizens. In today’s Insight Flash, we dig into spending patterns for those aged 65+ using our access to demographic data, seeing how spend has trended recently overall for this group and which subindustries and companies are most likely to benefit from extra dollars in these shoppers’ pockets.
Since the beginning of the year, spend growth for those aged 65+ has lagged y/y growth for other age groups. Although January spend growth for those over 65 was within a percentage point of growth for other age cohorts, this gap widened to 1.1% in February, 2.0% in March, and 4.3% in April. As spend growth for all age groups began to decelerate in May, growth for senior citizens continued to be the lowest for all months except for August. And although those aged 65+ actually saw the highest growth in spend in August, by September they were the only group for whom spend growth was under 5%. This implies that the cost of living adjustment may be sorely needed, and could revitalize spending in this demographic.
Macro Spend Trends by Demographic
Shoppers over 65 are more than twice as likely as the overall population to spend on Pharmacy Services. Other top subindustries for this group are Cybersecurity, Newspapers & Magazines, Health Insurance, and Cruises. Although some of these are necessities, more discretionary subindustries among that group such as Newspapers & Magazines and Cruises may see a lift in sales as seniors gain more spending power.
Top Subindustries for Those Aged 65+
There are several brands that are shopped more by 65+ year olds as well, many beyond those top subindustries. Those aged 65+ are more than four times as likely to shop Lively, Collections Etc, and Drapers and Damon as the overall population. These and other top brands may have seen pressure on spend due to inflation, but could see that pressure ease as 65+ year olds have more money to shop with.