With inflation and the highest interest rates in recent years, a fundamental shift is underway, especially among younger generations. Many of them still live with their parents, completely burdened by the high cost of living, especially housing expenses and high grocery prices. Some believe it’s time to reassess the idealization of homeownership and consider multigenerational living. While there’s nothing fundamentally wrong with this trend, the rapid decline in our standard of living undeniably affects our younger generations.
Statistics were recently revealed by a CNBC and Generation Lab Youth & Money survey. In a nutshell, 55% of young adults find buying a home significantly more challenging, 44% struggle with job hunting, and 55% have difficulty getting promotions. In Canada, according to RBC’s financial well-being survey, Millennials are most likely to suffer from sleep disturbances due to financial worries, with 53% expressing such concerns. Generation Z closely follows, with 48% of them also experiencing sleep disruptions related to finances. In other words, Generation Z and Millennials find it much more challenging to navigate the challenges of adult life.
Indeed, for young people, saving and dreaming of a better future are becoming less evident. Instead of saving for a financially unattainable home, some may wonder why not go out and have fun. This is somewhat happening now. Professional aspirations and the desire to build wealth for oneself and future generations seem less achievable for many of our young people. Moreover, despite a low unemployment rate, finding suitable employment is particularly challenging. A cruel paradox for those who believed the job market was supposed to offer them what they wanted or close to it. When this shift occurs, of course, eating habits change.
Baby boomers and Generation X will overcome these challenges more easily. Young people, on the other hand, once perceived as spoiled and overly idealistic, are now facing a different reality.
But history has taught us that fundamental economic changes often lead to innovation and resilience. After World War II, we witnessed the emergence of new restaurant models, such as fast food and efficient large-scale food production. A few years ago, food halls offered a new experience to consumers. Today, we may witness the rise of a new style of restaurant where food quality meets affordability, bridging the gap between existing options. The same goes for groceries. You never know.
A recent report on the food retail industry suggests that consumers, especially younger ones, are turning to discount banners, which have seen a more than 10% increase in sales, increasing their market share by nearly 2% compared to conventional grocers. Sales of private label products have also increased by more than 10% in the past year, surpassing national brands in all departments.
For young people, the stigma associated with shopping at Walmart, Giant Tiger, or even Dollarama is fading. Food elitism gives way to financial prudence. Generation X also had their share of misery in the early 80s when inflation and unemployment rates were very high. They survived. Young people’s hardship leads to changes in attitudes and behaviour. Predictable and necessary.
For all of us, however, we have a nation filled with heavily indebted consumers, our economy is stagnating, and productivity has been stagnant for some time. If saving becomes less of a priority for many who no longer believe that owning a home or having children is attainable, it could eventually catch up with all of us. Ambition and improving prospects remain the most valuable means for our economy to find a path to growth. We need to support our young people, but above all, our young people must be realistic while believing that better days are ahead.
