Dive Brief:
- In the U.S. 36% of consumers said they planned to splurge on apparel in the coming months. That’s according to the latest ConsumerWise survey from McKinsey, which illustrates how consumers are thinking, feeling and behaving using sentiment and spend data.
- Apparel was the top splurge category for Generation Z, with 40% of the group ranking the sector as the one in which they planned to “make more expensive purchases than normal” or purchase something to treat themselves, per the report. By contrast, food, including restaurants, dining out, bars and groceries, ranked as the top overall splurge category across generations, and apparel was the third most popular category.
- Women respondents said they were “prioritizing beauty and personal-care splurges” in the coming months, with 59% of high-income Gen Z women choosing beauty and personal-care splurges, up from 33% in the second quarter, per the survey.
Dive Insight:
The McKinsey ConsumerWise survey was conducted in the U.S. from late July through the first week of August. It indicated that during the third quarter of 2024, optimism in the economy “grew to its highest level in a year,” with 41% of respondents reporting that they felt optimistic in the third quarter, versus 33% in the second quarter.
Despite what McKinsey called a “cautiousness toward spending,” the report also said consumers displayed a willingness to splurge, depending on the category.
McKinsey also identified demographic gaps, with younger consumers reporting “significantly higher optimism” than older ones, and 47% of men reporting they felt optimistic about the economy, versus 37% of women.
“As keen market watchers already know, emerging economic indicators could dampen this newfound optimism,” Mckinsey said in the report. “While we expect the observed differences between demographic groups to remain through the end of the year, the next few months may be turbulent. Market uncertainty, the upcoming US general election, and ongoing geopolitical conflicts may test US consumers’ faith in the economy.”
In the survey, McKinsey said it was possible that consumers are “looking for ways to treat themselves after a period of sustained financial stress, both perceived and real.” The exception, the survey said, was low-income Generation X people and middle-income Baby Boomers, with both groups indicating a “decrease in their intent to splurge compared with the previous quarter.”
The report added that all the recent survey results indicate consumer intent to splurge, “but economic uncertainty and other external factors may affect their actual spending behavior.”
