Challenging economy leads to decline in teen spending

A challenging economy and low consumer confidence has led to a dramatic 14 percent decline in fashion spending, according to the "Taking Stock With Teens" survey published by Piper Jaffray. The 17th semi-annual survey is a national study, which is conducted by senior retail research analyst Jeff Klinefelter and a collaborative team of research analysts, aiming to determine purchasing behavior and brand preferences among teens. This spring, the team visited nine cities across the United States, surveying approximately 600 students with an average age of 16.3 years. In partnership with DECA, Piper Jaffray captured online survey responses from an additional 7,500 students with an average age of 16.7 years.

"After the drop in teen spending stabilized last fall, it is apparent that the continued challenges in the economy are having a dramatic impact on teen spending this spring and the 14 percent decrease is a direct reflection of this," said senior research analyst Jeff Klinefelter. "The decrease in spending leads us to believe that the economy is forcing parents and teens to cut back on spending across the board. Teens and their parents are still buying new clothes, footwear and accessories, but are more selective and increasingly price conscious. This will force retailers to discount prices and offer unique promotions to keep a steady flow of spending until the economy improves."

Key findings from the survey include:

• Survey results indicate that spending in the junior apparel category has decreased 19 percent, but increased 9 percent for footwear and 8-percent for accessories. Footwear posted the strongest year-over-year and sequential results at a 4 percent and 21 percent gain respectively – an indication that the strong footwear cycle, particularly relative to the weakness in apparel, continues for the youth demographic.
• West Coast Brands (e.g. Pacific Sunwear, Volcom, Quicksilver, Zumiez) took the No. 1 spot in clothing brand preferences among teens, followed by Hollister, Nike, Forever 21, and American Eagle. Specifically among brands ranked by young women, Hollister took the "most preferred" position, while West Coast Brands continued to remain a favorite among young men.
• Apparel spending by parents for their teens was $915 compared to fall 2008 at $1,085 but this level is above the $883 average in spring 2008. Parents indicated that annual spending on their own apparel declined 20 percent sequentially and 6 percent year-over-year and with a shift toward discount and value retailing. When shopping for themselves, parents cite Nordstrom and Kohl's as preferred. When shopping for their teen, parents picked Hollister, Nordstrom, and West Coast Brands.

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