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Purchasing Power of Kids and Teens

Restaurants need to recognize the influence and consumer strength of young customers.

By Derek Gale, Associate Editor -- Restaurants & Institutions, 2/1/2007

Millennials, the demographic group that includes today’s kids and teenagers, have an “inordinate and unprecedented” influence on family spending, say researchers from Resource Interactive, a Columbus, Ohio-based marketing firm.

This group should be viewed as co-purchasers for nearly everything purchased within a household—they influence 77% of grocery purchases and 59% of vacation purchases, according to a 2006 Harris Interactive poll. And while out-of-home dining purchases weren’t measured specifically, “it is no leap at all from the industries that [Harris Interactive] did test to dining out,” says Dr. Nita Rollins, director of thought leadership at Resource Interactive.

“Millennials go out to eat more than any other generation—24 times a month,” Rollins adds, and “parents are amenable to their suggestions.” She says the parents of these young people are seen as non-authoritarian figures who are actually more like an extension of their kids’ circle of friends. “It’s natural for them to consult [their children],” she says. Restaurants, therefore, “can’t underestimate the importance of marketing to this demographic,” Rollins adds.

Doing so would appear to have a double benefit, as members of this group are not only influencing family spending decisions, but spending their own money as well. Last year, 12- to 19-year-olds in the United States spent $179 billion, a record high, according to Teen Research Unlimited (TRU), a Northbrook, Illinois-based market research firm. Average spending per week among those in this age group was $102, says Michael Wood, vice president and director of research.

“I’m not sure restaurants have recognized the potential of this market yet,” Wood says. For those of driving age, “after school is a prime time—a big opportunity for restaurants,” he notes. “And on weekends, too, teenagers are looking for a place to go and be entertained.”

This presents an opportunity for restaurants. Wood says taking advantage of this opportunity is not only about tailoring menu items for teens, but also, and perhaps most important, customer service.

“Teenagers are incredibly sensitive to how welcome they are in stores. Creating an environment that’s welcoming of this age group… there’s a mindset that needs to be changed in this industry,” he says.

Wood mentions Seattle-based Starbucks as an example of a brand and a destination that has created a welcoming environment, even without specifically targeting teens. “I think restaurants can make subtle changes, without alienating their client base, and at the same time create an environment that teens will want to come to,” he says.

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