Teens would rather eat out than buy more clothes: Study
Teens are spending more money on food than on clothing, according to Piper Jaffray's biannual Taking Stock With Teens study.
Upper-income teenagers are spending 24 percent of their cash on food, which trumped the amount spent on clothing by 4 percentage points.
Starbucks, in particular, has remained a top restaurant brand for teens for years.
It seems there's at least one thing teens care more about than what they wear: what they eat.
According to Piper Jaffray's biannual Taking Stock With Teens study, teens are spending more money on food than on clothing, a trend that's been taking hold for several years.
The survey included responses from 6,000 teenagers who had an average age of 16. The 1,400 teens who fell in the upper-income group had an average household income of about $100,000, while the 4,600 teens in the group from average-income households had a mean income of about $56,000.
"Food remains the single largest category of spend within the teen wallet," analyst Nicole Miller Regan, wrote in a research note Tuesday.
Upper-income teenagers are spending 24 percent of their cash on food, which trumped the amount spent on clothing by 4 percentage points. Teens from average-income homes are spending about 21 percent on food, 2 percentage points higher than their clothing spend.
"Broadly speaking, we see Spring 2018 results as a continuation of the trend of restaurant spend outpacing clothing spend as first seen in the Spring 2014 survey cycle," Regan said. "We believe this reflects the restaurant industry's arguably less discretionary nature as a category of spending relative to other consumer (discretionary) categories."
For teens in the upper-income bracket, spending on food has continued to grow since 2014, while spending on clothing has shrunk. In comparison, the survey found that average-income teens flip-flopped between spending more on food and spending more on clothing in the same time period.
Teenagers, part of the so-called Generation Z, are currently the largest age cohort of American customers, eclipsing the millennials. How they shop and what they shop for is valuable information for brands, particularly as this generation matures.
Regan said that teens are most influenced by taste when it comes to choosing where to eat. Convenience is the second-biggest factor, followed by menu selection. Nutrition was the lowest-ranked attribute.
Piper Jaffray also discovered that more teens are spending money on dinner, with 66 percent of all teen dining occasions happening at night. Breakfast accounted for 2 percent of meal occasions, while lunch was about 20 percent.
"The majority of teens, approximately 66 percent, still dined out most frequently for dinner, which we believe has evolved to become a social tradition and a form of entertainment for teens, especially as discretionary spending has been reevaluated during recent times of increased economic pressures," Regan wrote.
Where the teens eat
Gen Z isn't crazy about full-service restaurants. These teens prefer limited-service chains, ones where they spend less time interacting with waitstaff and are free to congregate for long periods of time or take their food to go.
In spring 2009, 57 percent of teens preferred full-service restaurants. In spring 2018, there has been a complete swing. Some 65 percent of teens would prefer to eat at a limited-service chain.
Starbucks, in particular, has remained a top restaurant brand for teens for years. In 13 out of the last 17 surveys, Starbucks has been the No. 1 food brand for upper-income teens to shop at. Chipotle was the top restaurant in fall 2010 and spring 2015, while Chick-fil-A was top in spring 2017 and spring 2018.
For average-income teens, Starbucks hit the top spot 16 out of the last 17 surveys. The one time it didn't, in fall 2010, McDonald's grabbed the top spot.
Regan said Starbucks remains the firm's top investment recommendation for 2018, and she reiterated her $70 price target. The company is currently trading at about $59 per share.