Gen Z Shoppers Spending Less on Staples, More on Wellness

Gen Z still ranks national brands #1 in purchase preference across every shelf-test category — beating store brands, premium and direct-to-consumer (DTC) alternatives. But 59% of such consumers actively trade down in one category to fund a premium purchase in another — cutting staples like food and beverages and household goods to splurge in health and wellness (25% willing to pay a premium) and skincare and beauty (22%).

In addition, so-called Dollar stores are becoming a go-to spot for grocery shopping for younger shoppers. While 42% of both Gen Z and Gen X and 40% of Millennials say they have purchased food/beverages from chains like Dollar General and Dollar Tree in the past month, that is significantly more than Boomers, with only 25% saying the same.

Those findings are contained in First Insight’s latest study, “Is Gen Z Still Choosing Your Brand? Here’s What’s Quietly Changing Across CPG.”

“Gen Z [those aged 14-29] still picks national brands when you put four options in front of them,” said Viki Zabala, Chief Strategy and Growth Officer at First Insight. “What this data shows is that they’re noticing them less, exploring them less, and in categories like vitamins, they’re a coin flip away from choosing a challenger instead.”

As a result, Zabala says the brands that will win the next decade are the ones “that understand exactly where they stand in the Gen Z value hierarchy — by category, by channel — and act before that gap becomes permanent. As boomers age out of peak purchasing, this isn’t a cycle. It’s a handoff. And right now, challengers are on the receiving end.”

First Insight describes itself as global retail platform that uses its native AI to turn real-time customer feedback into profitable strategies for more than 600-plus brands and retailers. Click here for more from its latest study.