Youth-obsessed retailers must look to an older group of big spenders

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The Independent Online

The retail sector is in turmoil because of the ageing population in the UK, according to a new study of demographics by Verdict, the retail consultants.

The retail sector is in turmoil because of the ageing population in the UK, according to a new study of demographics by Verdict, the retail consultants.

The report, "Verdict on Retail Demographics 2000", claims that retailers have so far been slow to respond to the fundamental shifts in the population that are behind many of the recent changes in consumer behaviour and spending.

A spokesman for Verdict said: "Retailers have traditionally been fixated by young consumers. As the new decade unfolds, the real potential for spending growth is among older, more mature customers. They are affluent, demanding and very poorly catered for."

The most significant change is occurring in the group aged in their late twenties and thirties, which was the key target market for most retailers in the 1980s and 1990s. Also, the group of 15 to 24-year-olds, which has declined in the 1990s, will see a 9 per cent recovery in the next decade.

According to Verdict, by 2005 there will be 450,000, or 11 per cent, fewer people in the " Friends" generation of 25 to 29-year-olds, and 600,000, or 13 per cent, fewer in the "Bridget Jones" category of 30 to 34-year-olds.

This is bad news for many mainstream retailers, such as Marks & Spencer, John Lewis and Currys, who target this segment, and for companies selling household or DIY products, such as B&Q and Do It All, as there will be fewer people in this age group settling down and buying homes.

But the demographic shift will mean busier lifestyles among remaining 25 to 39-year-olds, fuelling greater demand for time-saving technology such as mobile phones and PCs and services such as household cleaning and online shopping.

While "thirtysomethings" are declining, the number of people in the 40-plus age group is growing as baby-boomers hit middle age in the next 10 years. This is the group most likely to spend on electrical appliances, DIY and home products.

Meanwhile, the "War baby" generation will start to reach retirement age and, enjoying the benefits of private pensions and improved healthcare making them more energetic than their predecessors, Verdict predicts that this "generation of greys" will seek to spend money on a range of products, services and activities.

According to Verdict, the concept of the mass market is now defunct. What is emerging instead is a far more fragmented marketplace, with each segment needing to be addressed separately.

The spokesman said: "Going forward, retailers need to be more focused. They need to reach out to these various discrete groups of customers with dedicated formats and separate brand identities that they can relate to."

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