- U.S. Bancorp Piper Jaffray Conducts Fifth Bi-Annual National Study Of
Generation Y Shopping Behavior and Brand Preferences -
MINNEAPOLIS, April 10 /PRNewswire-FirstCall/ -- Over the past six months,
the economic downturn has continued, but since last fall teens have increased
their spending on apparel, shoes and accessories. While the teens are
spending more, their parents continue to spend money on their teens, but are
slightly curbing spending on themselves. In addition, teens continue to list
the same three top brands as last fall in Abercrombie & Fitch (ANF, Strong
Buy, $31.04, #>), Limited's Express Unit (LTD, Outperform, $13.44, #=) and
Pacific Sunwear (PSUN, Strong Buy, $21.21, #>). This data -- and much more --
was released today by U.S. Bancorp Piper Jaffray Retail Analyst Jeff
Klinefelter, who recently completed his fifth proprietary research survey on
teen spending habits and retail brand perception. Klinefelter conducted mall
research tours with nearly 600 teens from 12 high schools in 11 states across
the country and one province of Canada.
Klinefelter surveyed teens on their favorite places to shop as well as
their spending habits. Based on their responses, Abercrombie & Fitch was
found to be the most frequent overall destination for the fourth survey in a
row grabbing 12 percent of the total votes. In second was Limited's Express
Unit, followed by Pacific Sunwear. The same survey last fall found that
Abercrombie & Fitch was the most frequent overall destination, followed by
Pacific Sunwear and then Limited's Express unit (LTD, Outperform, $14.52, #).
In spring 2002, the students chose Abercrombie & Fitch as their most frequent
destination, followed by Limited's Express unit and American Eagle Outfitters
(AEOS, Outperform, $15.01, #>=).
"Abercrombie & Fitch continues to be the top brand in our survey," said
Klinefelter. "More importantly, in our view, is that Abercrombie's Hollister
concept showed up in the top five brands having been only listed in the 24th
spot six months ago. This is especially interesting, we believe, considering
Hollister had stores in only two-thirds of the markets we surveyed. Also, we
believe Express' move back to the number two spot this spring was due largely
to male teens voting for Express Men's/Structure, which made fifth place this
survey up from 12th spot in fall 2002."
Several other brands shifted rankings in the past six months according to
the students. American Eagle Outfitters remained in the same place as last
fall finishing fourth. In fifth was Abercrombie's Hollister concept as
mentioned above. Aeropostale (ARO, Strong Buy, $15.25, #@>+) moved up
slightly to 14th, from the 15th spot last fall. Aeropostale also had a
presence in just two-thirds of the markets that were polled. The Gap (GPS,
Outperform, $15.30, #>=) dropped from fifth to ninth, while Old Navy also fell
from seventh to 10th in the past six months.
"Owing to what we believe is a combination of more choices of retailers
from which to shop for current fashion trends as well as Gap Inc., focusing on
more democratic appeal in its concepts, Gap and Old Navy both fell in the
ranking and mind share," said Klinefelter.
Gen Y - Teen Spending Increases
Yearly spending among teens was $1,400, up from $1,156 in fall 2002. In
spring 2002, yearly spending was $1,542. In spring 2003, girls spent $1,572
compared with $1,342 in fall 2002 and $1,458 in spring 2002. Guys spent $925
in spring 2003 compared with $890 in fall 2002 and $1,661 in spring 2002.
"Total spending on fashion products (apparel, shoes and accessories)
increased by 21 percent on a sequential basis," said Klinefelter. "On a year-
over-year basis this spending estimate is down 9.2 percent but on a two-year
basis, it is up 6.1 percent. Bottom line, we believe this modest sequential
improvement is an indication that fashion spending hit an inflection point
during the past fall season and should continue to improve with a strong
Parents' Contribution to Teen Spending Remains Flat
In addition to surveying the students on spending patterns this spring,
Klinefelter also surveyed approximately 150 parents, eliciting a 27 percent
overall response rate. According to the data, parents are contributing $927
annually to their teens' spending, compared with $935 in fall 2002 or down one
percent sequentially. In spring 2002, parents spent $1,115 on their teens.
Despite the drop, parents continue to pare their spending with greater
magnitude, versus expenditures for their teens. Parent apparel spending
slipped six percent sequentially and 23 percent from the prior year to $911.
Also, shopping frequency is down overall and the major chains and discount
stores were the only channels to gain shopping share.
Brand preferences for the parents reflect the channel shift to favor chain
stores with Kohl's (KSS, Market Perform, $55.71, #@) and J.C. Penney (JCP, Not
Rated, $18.89) among the top three favorite clothing stores when they shop for
themselves. Department stores continue to be an important channel for the
parents as it represented 32.5 percent of shopping time. According to the
parents, the favorite store to purchase products for their teens is American
Eagle Outfitters, followed by Express, and Abercrombie & Fitch and Gap (tied
for third place). Kohl's also tied for third place, versus fall 2002 when it
did not make the top five list. However, in the markets where Kohl's has a
presence, it was the second choice behind American Eagle. This is in contrast
to six months ago when it ranked fifth.
A key component of the survey asked the students to identify what
percentage of their disposable income they spend on video games/systems,
music/movies (DVDs, CDs), electronic gadgets, clothing, accessories/personal
care, shoes, food, concerts/movies, car, books/magazines and other. This
spring, clothing and accessories remain two of the most frequently shopped and
purchased categories, second only to food. On average, teens shop for
fashion-related products four times per year, with female consumers shopping
five times per year and male consumers shopping slightly less than four times.
The video games and hardware category also continues to increase in shopping
frequency reaching slightly more than two times per year on average for all
students. DVDs and CDs are also a frequently shopped and purchased category.
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