Eating out with the Millennials
20 February, 2013
The generation now aged 18 to 30—the Millennials—are vital to the hospitality industry, says Paul Flatters, and understanding their hopes and needs is essential
The language used to describe the Millennial generation (roughly those born between the early 1980s and the mid 1990s) has changed since the onset of the financial crisis. While they were once talked of optimistically, as “digital natives” or the “internet generation”, the narrative has become notably more pessimistic as the prolonged economic downturn takes hold. Their youth makes them of paramount importance to the hospitality industry—and their values and attitudes are encouraging for the sector, while also highlighting potential challenges.
Despite the gloomy economic picture, Millennials themselves are among the most optimistic about their future. Almost a third—29%—of Millennials believe their financial situation will improve in the next year, against a national average of 22%. They are also the only age group for whom the number who are optimistic outweighs the number believing their situation will get worse: older age groups are far more pessimistic.
They are also slightly more optimistic about the future of the national economy: 18% of Millennials think this will improve in the next year (against 35% who think it will get worse). In contrast, just 16% of older age groups think the economy will improve (against 46% who think it will get worse). In some cases, the economic optimism is due to Millennials’ insulation from some of the effects of the crisis: they are less likely to have children or other dependents, and also more likely to be living at home. The optimism is also due to lifestage factors: being young, they are some way from fulfilling their earning potential and they expect their income to increase as they get older.
This optimism translates into good news for the leisure sector, and for pubs and restaurants specifically. Millennials are very leisure-focused, being the most likely generation to rank leisure or friends as “very” important. They are the most likely age group to participate in a range of leisure activities (including eating or drinking away from home), and they participate more often. More than three quarters of Millennials include “eating out” as a leisure activity (77%), against a national average of 73%. For pubs or nightclubs, 70% of Millennials include them as a leisure activity, against 58% of the population as a whole, and 75% of Millennials who drink in a pub or nightclub do so at least once a month, versus 69% of older groups. Of those who eat out, 65% of Millennials do so at least once a month, versus 59% of those aged over 35.
This proclivity for leisure and social activity among Millennials is driven by an appetite for new experiences: 33% of Millennials agree that adventure and taking risks is important to them, while 35% agree that trying new products and services is important. This appetite is notably higher than for other generations, and a key driver in the emphasis Millennials place on their leisure time.
Despite their economic optimism and the enhanced value Millennials place on leisure, there are some causes for concern. Chief among these is the level of satisfaction Millennials get from their leisure time. Although Millennials place more importance on leisure than older generations, the proportion with a high level of satisfaction with it is on a par with those aged 35-54 and significantly lower than for those aged over 55.
Although they are more optimistic than other generations, many Millennials have come of age during the financial downturn, and this has left a significant, potentially permanent mark on their consumer behaviour. The most apparent is their focus on price: 63% of Millennials say that getting the cheapest price is important to them, against 54% for those aged over 35. This is not driven by a pessimistic financial outlook, but has been shaped by the financial environment in which they have matured. For the hospitality sector, the consequences of this are crucial. Although younger consumers are leisure-oriented and optimistic, they are also more price-conscious than any other generation, and their behaviour is driven by two recessionary trends, Discretionary Thrift (a conscious move away from conspicuous forms of consumption) and Mercurial Consumption (a lack of brand loyalty in favour of value-hunting).
The Millennial generation in the UK has come of age against a backdrop of long-term financial insecurity and dwindling optimism. Despite this, the generation is more leisure-focused, more open to new experiences and more economically optimistic than older generations, which is greatly encouraging for the leisure and hospitality sectors. Crucially, however, Millennials are much more price-conscious than other generations, reflecting how important it is for the sector to offer value for money and rewarding experiences.
Paul Flatters is managing partner at Trajectory Throughout this article, “Millennials” refers to adults in the UK aged between 18 and 34. All data, unless stated otherwise, from Trajectory Global Foresight, 2012 (UK only)
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