Young Millennials and older Gen Z are a force to be reckoned with

With fewer dependent children, 25-34s are less impacted by rising costs, and have been driving growth in the eating out market, Lumina data shows

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Inflation looks to be going nowhere as it steadies at 3.8% year-on-year for August according to the Office for National Statistics. The cost-of-living remains, disproportionately impacting lower- and middle-income households who continue to feel the pinch. Only higher-income households have seen spending power grow over the last year, by 5.0% (ASDA income tracker). So, who are the consumers spending more out-of-home?

25-34s are increasingly engaged

Participation in the out-home-market is growing by +1ppt year-on-year, with 58% of consumers eating or drinking out in an average week. This was boosted by the warm and sunny weather over spring and summer and some consumers feeling better off. The average out-of-home consumer is also spending +8.5% more per trip compared to last year, with all shopper groups seeing trip spend growth apart from 18-24s (-1.2% year-on-year). These young adults are early-on in their careers, with lower wages and are therefore most impacted by rising costs, inhibiting their ability to engage with the market.

Comparatively, 25-34s have seen spend and frequency grow by +12.5% and +13.4% respectively over the last year. Already dominant in the market, accounting for just under a quarter of all occasions, they are the only age group to grow occasion share over the last year, furthering their market dominance.

Three in four 25-34s are also part of the ABC1 group, and this has been growing over the last few years. A large proportion of these consumers live and work in urban areas with higher footfall in the capital, where consequently, there is a large over trade of more affluent consumers. With fewer dependent children, older gen Zs and younger millennials are less impacted by rising costs and Lumina data shows they have been driving growth in the eating out market for a while.

Pubs & bars are the real winner

Whilst pubs & bars struggled during the height of the cost-of-living crisis, the warmer weather and improved spending power of younger consumers has resulted in growth for the channel, gaining +1.5ppts occasion share. 25-34s are to thank for this growth, and are visiting pubs and bars more for drink-only occasions. Within just the 25-34 group, pub & bar drink occasions have grown share of day-parts by 6ppts versus the same period last year, gaining share from traditional mealtimes. This is driven by more consumers looking for high-tempo occasions to socialise with friends and colleagues for example, with after work drinks.

However, this group is multifaceted, and there is also growth in low-tempo missions for consumers looking to wind down and relax. This highlights the breadth of opportunities for pubs and bars to capitalise on, from seasonal cocktails to sports-led deals, whilst also offering quick-bites and elevated bar snacks to further boost purchases.

Quality over quantity

Premiumisation also offers an opportunity to attract these consumers. 25-34s are increasingly choosing establishments because they offer good value-for-money (+2.4ppts YoY). Consumers’ interpretation of value is less about the ‘cheapest’ products to save money and instead viewed as justifying higher spend through being delivered a higher quality option. Specifically, value for money is viewed as great taste and fair pricing according to over ¾ of consumers (Lumina Intelligence Psychographics Survey). Seasonal and fresh ingredients, global cuisines, trend-led flavours and experiential offerings can all be used to drive quality credentials and deliver value for money.

A view to the future

Those aged 25-34 also tend to be more health-conscious, heavily influenced by social media trends and wider concerns around ultra-processed foods. Consequently, the fastest growing reason for choosing an establishment amongst 25-34 year olds is because of healthy food options (+3.9ppts YoY). Tapping into trends around fibre, macronutrients and minimal processing will help cater for these demands.

The importance of delivery to 25-34s cannot be overstated, accounting for just under a quarter of all occasions, an over-index of 155 versus the average out-of-home consumer. Delivery occasions across the out-of-home market have grown by +1.4ppts, driven in large part by 25-34s as they increasingly look for convenience. Strong demand for delivery is expected during the World Cup 2026, which will be jointly hosted by Canada, Mexico and the United States, with games televised into the early hours of the morning. This provides opportunities for more game-day focused delivery options such as half-time and group deals including pizza, fried chicken and burgers, catering towards those caught up in the football fever.

Older gen Zs and younger millennials are feeling more confident in their finances, willing to spend extra for more premium options and driving growth in the eating and drinking out market. As the largest and top growing demographic, operators need to cater for their demands through diverse menus featuring quality, experiential offerings as well as trend- and health-led options.