Boomers To Boost Spending On Luxury Goods, Healthcare

Senior citizens, a demographic whose spending was significantly curtailed by the pandemic, are expected to spend substantially across a number of sectors as COVID-19 restrictions and fears reside, Bloomberg reported.

Fund managers and other market insiders told Bloomberg the expected surge in spending is due to new comfort with online purchasing among many senior citizens and also pent-up demand for medical procedures and devices.

The number of people 65 or older around the world will double between now and 2050 to 1.5 billion, according to Bloomberg. The report also quoted data from consultancy World Data Lab that put the spending power of those 65 old or order at $14 trillion 10 years from now, up from $8.4 trillion in 2020.

For all ages, the World Data Lab’s analysis concluded that due to COVID-19, “in 2020, the global consumer class shrank for the first time in half a century. However, the global consumer class is expected to recover in 2021, making COVID-19 a ‘temporary shock.’

The organization considers anyone who spends more than $11 per day to be a consumer, according to the data.

Christopher Rossbach, chief investment officer at J. Stern & Co., told Bloomberg, “The pandemic has accelerated many of the issues related to aging populations and has highlighted the urgency of resolving them. We think they will be significant drivers for growth and investment.”

Perspectives such as Rossbach’s are one reason analysts expect a surge in healthcare related spending to begin shortly, according to Bloomberg.

In the United States, the National Retail Federation (NRF) predicted that U.S. consumers will push retail sales to more than $4.44 trillion in 2021, PYMNTS reported. The group put U.S. sales at $4.02 trillion for all of 2020, according to a press release.

NRF CEO Matthew Shay said alongside the forecast: “The economy and consumer spending have proven to be much more resilient than initially forecasted. The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity have put millions of Americans back to work. While there are downside risks related to worker shortages, an overheating economy, tax increases and over-regulation, overall households are healthier, and consumers are demonstrating their ability and willingness to spend.”