Gen Z could overtake Baby Boomers in spending by 2029, but remains price-conscious: NIQ

Gen Z is set to become an important force in global consumer spending, with its spending power growing faster than that of other generations. But despite its rising financial clout, the generation remains highly sensitive to price, according to a report by NielsenIQ (NIQ) and World Data Lab.

The report, A Tale of Two Consumers: The Polarised Mindsets Reshaping Global Consumption, said Gen Z is the fastest-growing generation in terms of spending power and is expected to overtake Baby Boomer spending by 2029.

While Gen Z’s current purchase frequency and household-level spending remain lower than those of older generations, its influence is already extending beyond its own purchases. NIQ said the generation is shaping culture, influencing household purchases and driving new, experience-led shopping behaviour.

But higher spending power does not mean Gen Z is willing to pay more across the board.

“Due to their life stage,” Gen Z is highly value-sensitive today, with price playing an outsized role in purchasing decisions, NIQ said. At the same time, the generation remains strongly oriented towards values.

The report identified a gap between what Gen Z says it values and what it actually buys. While sustainability, authenticity and values may be important to the generation, price, quality, convenience and cultural relevance can ultimately determine what enters its shopping basket.

The shift is already visible in some categories.

In the US, Gen Z and Millennials are showing higher spending on beauty and personal care, with younger consumers “overtrading” in the category, NIQ said.In health and beauty aids, 57% of Gen Z spending comes from premium products, and the share has increased compared with two years earlier, according to the report.

At the same time, NIQ identifies snacks, yoghurt, food and beverage staples, personal care and household essentials as categories where value remains important for Gen Z.

The report said Gen Z’s spending power is expected to accelerate as more members of the generation enter the workforce and improve their financial position. It also projects that Gen Z will lead growth in affluent spending, while Gen Z and Gen Alpha will lead growth in core spending between 2026 and 2036.

NIQ’s broader conclusion is that consumer behaviour cannot be explained simply by age or income. Consumers across generations are switching between paying more when a product clearly justifies its price and trading down when the value is less apparent.

For Gen Z, that means rising spending power may create room for premium consumption, but price remains a key filter on what actually makes it into the basket, the report said.