Millennials are Spending Less at Restaurants and More in Other Markets

millennials at a table

You are probably tired of seeing the term millennial in headlines. We don't blame ya! 

But as a marketer or operator, millennials are likely part of your target demographic. This segment of the population will soon have the greatest buying power, so its no wonder we are trying to predict their every move. 

According to a recent report from "CNBC," there has been a shift in where consumers are choosing to spend their money. 

"It stands out as a bit unusual how soft restaurant spending has been considering where we are in the business cycle," said Michelle Meyer, head of U.S. economics at BofA Merrill Lynch to "CNBC." "The consumer should be spending more on a broad range of items. But we've seen restaurants slowing more akin to a recessionary environment."

Part of the reason restaurant sales have been slowing down is because millennials are spending their money in other markets instead. 

In 2015, the pace of restaurant spending by millennials went from 9% year over year to merely 1.6% this year. 

Millennials are, however, choosing to dine at smaller local restaurants more than big chains. The average check price has also increased, meaning diners may be dining out less but they are spending more per meal. 

"CNBC" points out that although millennials are spending more in other markets, grocery and retail sales have also seen a slowdown. 

But it's important to mention, the research doesn't fully capture the data from online grocery sales. 

Online retailers, like Amazon, just experienced a massive sales spike due to Black Friday and Cyber Monday. On Thanksgiving, Amazon accounted for 45% of online sales from the top 50 retailers and 55% on Black Friday. 

According to Adobe Analytics, consumers spent a record $6.59 billion online on Cyber Monday. 

While some online retailers raked in billions, restaurant sales still aren't corresponding with the strength of the economy. 

"It's unusual to have this type of restaurant slowdown without having the economy slow down broadly," said Meyer. "I think it will be telling to observe what they spend on." 

Meyer predicts that the holiday season will ultimately bring in more sales for restaurants and furniture retailers.

Read more from "CBNC"