Changing Demographics and their Implications for Retailing

Abstract

This chapter identifies trends in the size, composition, and distribution of the population of the United States and discusses how these trends will affect retail stores and shopping centers. It begins with a review of recent national population growth, and presents Census Bureau projections to 2050 for the nation as a whole. The United States is expected to add another 16.8 million people between 1994 and 2000. During the first half of the next century, between 20 and 25 million new Americans will be added in each decade through a combination of net natural increase and immigration. Census projections also are the basis for a discussion of continuing population shifts to the southern and western states. The Northeast and Midwest will grow, but their respective shares of the U.S. population will decline. By 2010, less than 40 percent of the population will reside in these two regions, down from 43.6 percent in 1993. Population shifts among regions and within metropolitan areas will create opportunities for shopping center development but will also result in declining demand and excess space in some markets. Other sections of this chapter examine the implications of an aging population, focusing on the shopping habits of mature consumers. No single generation will dominate consumer preferences or shopping patterns in the future. The population will be increasingly diverse racially and ethnically. Stores can no longer target their merchandise solely toward middle-income white suburban women in the twenty-five to forty age bracket. The chapter also looks at changing household composition and work patterns. More single-parent households and working mothers mean families have less time to shop. They will combine shopping trips with family entertainment. The chapter concludes with a look at household income patterns. Reported incomes are underestimated and do not account for inherited assets. The accumulated wealth of the elderly will represent an important source of disposable income for the baby boomer generation and their children in the near future.