OPINIONFinancing

Gen Z is less likely to notice price hikes

Technomic's Take: Younger consumers are less likely to say prices are increasing. Is it their short attention span or their short time on earth?
Gen Z prices
Gen Z customers are less likely to notice price hikes. / Photo: Shutterstock.

Technomic's Take

You’ve probably heard some form of the phrase “if you’re not worried/angry/outraged, you’re not paying attention.” In other words, ignorance is bliss.

Given that news of inflation, especially at restaurants, has been inescapable, my assumption is that nearly every person that has eaten at a restaurant in the last year has been on the lookout for or has noticed price increases on the menu. It’s simply impossible to be blissfully ignorant of menu inflation. While Technomic’s data is showing this to be largely true, those Gen Zers that I’ve previously written about, are again behaving differently than other age groups.

In a recent Technomic survey for 1,000 consumers, only 24% of those ages 18-24 said that menu prices increased significantly at restaurants they frequent, compared to 34% of those 25-34 and 43% for those 35+. We see the same story when it comes to grocery store prices, with Gen Z less likely than other age groups to have noticed retail prices increasing.

Similarly, Gen Z were also much less likely than other age groups to say that prices have gone up on nearly every item–39% compared to an average of 60% for ages 25 and up.

We also asked consumers if they’ve noticed portions getting smaller. While a majority of Gen Z (57%) say they’ve noticed they have noticed shrinking portions, 64% of millennials report the same.

Does this mean that Gen Z consumers are just buried in their phones, oblivious to the world around them? Does it mean that operators can keep raising prices and cutting portions hoping younger consumers won’t notice? No and no.

A reason fewer Gen Z consumers than average are noticing menu price increases is likely attributed to their limited frame of reference–a set of assumptions or ideas that are used to filter how something is perceived. In the curious case of a Gen Z consumer, their frame of reference is limited because the timeframe from which they can pull from experiences and historical context is narrow. Put simply, Gen Z consumers weren’t alive when bread cost only a nickel. While they’re likely to notice some price increases compared to the year before, they don’t have long-term reference points which, to older consumers, can make it feel like prices have tripled (or portions have halved) in the last year.

For operators, as Gen Z builds up more life experiences, and historical reference prices become ingrained in their brains (or at least in their digital order history), it will become more difficult to raise prices without inviting more pushback from younger consumers. Assuming a customer may not notice a change in menu price or portion size will become more unlikely over time, and like that hackneyed phrase I mentioned early, customers will be paying attention and they will be angry.

For more information on pricing and menu research, click here or reach out to Technomic at info@technomic.com or technomic.com. Technomic is a sister company of Restaurant Business

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