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Baby boomers consumer boom

Campervans will be the more likely purchase over children’s Tonka trucks in the coming years according to the latest AMP.NATSEM Income and Wealth Report.

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The report, Tomorrow’s consumers, forecasts that sales of goods and services preferred by older Australians will increase rapidly over the next 15 years due to demographic change, while those associated with children will face a relative slump.

Demographic change will alter consumer markets, predicting above average spending growth in areas like health care, caravan sales, gambling, golfing green fees and live theatre.

Markets likely to face a relative decline include children’s goods and services such as baby foods, toys, clothing and footwear, sporting lessons, driving lessons and cordials.

The report forecasts that there are likely to be more “grey nomads” touring the country by 2020, with a 69 per cent increase in caravan sales. Golf courses will also boom, with a projected 73 per cent increase in green fees.

Australians are also likely to increase their appetite for alcoholic beverages and gambling, although tobacco consumption is forecast to decrease.

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However, as baby boomers become more cautious about damaging their joints, active sports will become less popular. Spending on squash court hire, water sports and ski resorts is expected to grow at a rate that is below average, although spending on health and fitness studios will remain popular.

“Arguably there has never been a more exciting time to approach retirement.” Report co-author and NATSEM Director Prof. Ann Harding said.

“The baby boomers will be older, their children will have finally left home, and they will start to spend more on their leisure, health and fitness. So we will see increased consumer spending in these areas.

“But the shift in demographics will bring its own challenges for both industry and government,” Professor Harding said.
While the number of households headed by someone aged 65 or more will increase by around 1 million to represent more than 25 per cent of all Australian households, the over 65s are likely to only contribute 15 per cent of total spending.

“Industry will also have to adapt to slower growth in consumption and profound changes in the types of goods and services demanded by consumers.”

In addition, the ratio of working age Australians available to support the over 65s will fall from as high as 7.3 working age people for every one retiree in 1960, to one retiree for every 2.4 working age Australians by 2040.

“Governments are already starting to consider how to manage the higher health, aged care and pension costs associated with an ageing population,” Professor Harding said.