Hispanics Poised to Exceed Millennials in Consumer Spending
By Rafael de Vengoechea
Although National Hispanic Heritage Month has ended, the contributions that Hispanic Americans have had on our country should be celebrated all year long. Currently, the Hispanic population is the second fastest growing ethnic group in the United States – thus making it an important driver of economic growth. In Los Angeles, more than 48 percent of its four million residents are Hispanic.
As the Hispanic population continues to grow, the increase in spending among Hispanics will likely exceed that of Millennials and Baby Boomers combined over the next five years. While the topic of millennials and spending has been widely covered in the media, the rising economic power of Hispanics should not be ignored.
According to a recent Morgan Stanley study, Hispanics are poised to take 1.4 percent incrementally of the consumer wallet, or about 13 trillion dollars. That compares to about 0.4% for the millennial population. Among this shift, many changes have been noted in the retail and food industries. The study also found that Hispanics tend to spend more of their money on food consumed at home, while Millennials are more likely to spend more dining out.
Interestingly, a shared trend between Hispanics and Millennials is their retail spending. While past studies have shown that consumer spending in the retail industry has declined due to price deflation, Hispanics and Millennials are reserving more of their income for retail spending than ever before. So although average retail spending has declined, Hispanics and Millennials could reverse the downtrend. It is evident that the Hispanic population is making a significant impact culturally and economically in the country; and will only continue to do so with time.