Forget millennials — these 2 groups are the real future of America’s consumers

Everyone keeps talking about millennials and their shopping habits.

But that doesn’t mean they will be the only influential consumers in America’s near-term future.

A Morgan Stanley team led by Paula Campbell Roberts argues that two other demographic groups will also be key drivers of future consumption trends in the US: Hispanics of all ages and whites over 65.

The team writes that in the next five years the proportion of Americans who identify as Hispanic or Latino will increase by a “whopping” 1.6 percentage points and that of people over 65 will increase by 0.9 of a percentage point. Meanwhile, millennials’ share of the population will increase by only 0.6 of a percentage point. Moreover, 52% of the US’s population growth will be driven by the Hispanic population.

“The result will be wallet share growth for the white over 65 and Hispanic populations in the coming years,” the Morgan Stanley team argued, as can be seen in its chart below.

Wallet share is the percentage of a customer’s (or, in this case, a demographic group’s) expenses for a product(s). Or, as Morgan Stanley puts it, “this cohort has above-average income allocation to shelter, food, apparel, cell phones and used cars.”

Notably, the Hispanic population is quite young, and a large percentage of millennials in the US are Hispanic. In fact, according to data from the Census Bureau’s 2014 American Community Survey, about 21% of adults ages 18 to 34 identified as Hispanic or Latino – so there is a sizable overlap between millennials and Hispanics.

The biggest shifts in wallet share within the Hispanic group will be for middle-aged people in the 55-to-64 and 45-to-54 age brackets, according to Morgan Stanley’s estimates. Though whites over 65 will see the biggest gain in wallet share in the coming years, whites ages 45 to 54 will see the biggest drop.

Morgan Stanley