Aging millennials could be big spenders.
In a research note Monday, Credit Suisse predicted what consumer spending habits will look like over the next five to 10 years as millennials, those aged 18 to 34 in 2015 and "the largest population cohort," enter what the firm's analysts called the "sweet spot for spending."
And Credit Suisse estimated that "behavior may differ than in the past."
Meaning the golden days for mall-based retailers like Sears Holdings Corp. (SHLD , unarguably already struggling to stay afloat, and cinemas such as AMC Entertainment Holdings (AMC - Get Report) are coming to an end.
"The middle-age cohort [aged 45 to 54] will be declining," Credit Suisse's analysts said. "They spend the most today and account for the highest percent of consumption. Growing older, the 65-plus years-old cohort is expected to show the largest growth over the next 10 years, yet that has been when spending has dropped off."
Here's who may win and who may lose from millennials gaining more purchasing ground.
As more millennials prepare to turn 35 and older over the next 10 years, they are starting to buy houses rather than rent, making them more focused on home improvement, Credit Suisse said, estimating that retailers like Lowe's Companies (LOW - Get Report) and Home Depot (HD - Get Report) will benefit from this shift.
Despite high student loan debt and the rising cost of home ownership, 62% of millennials surveyed by Fannie Mae in April said they felt confident buying a home, higher than the 60% tallied in March.
It's no secret that millennials are not shopping at malls. There are 20 mall-based retailers, by TheStreet's count, including J.C. Penney (JCP - Get Report) and Sears that have been forced to shutter massive amounts of stores due to the decline in foot traffic from increased online spending.
Credit Suisse highlighted traditional apparel and footwear retailers as some of the biggest losers from the consumer shift, calling out J.C. Penney, Lord & Taylor parent Hudson's Bay (HBC , Nordstrom (JWN - Get Report) , Kohl's (KSS - Get Report) , Macy's (M - Get Report) , Calvin Klein parent PVH Corp. (PVH - Get Report) and Ralph Lauren (RL - Get Report) .
"Given millennials' increased focus on fresh foods, natural and organic," Credit Suisse said names like Whole Foods (WFM and Sprouts Farmers Market (SFM - Get Report) will see sales boosts over the next 10 years.
Credit Suisse said millennials focus on "food quality, convenience and digital accessibility," meaning casual dining, already seeing significant declines, will be pressured. Companies at risk include Darden Restaurants (DRI - Get Report) , the operator of Olive Garden and LongHorn Steakhouse, and Bloomin' Brands (BLMN - Get Report) , which owns Outback Steakhouse and Carrabba's Italian Grill.
Rugged gear, tech and apparel makers are coming out with some really cool stuff, making millennials even more drawn to outdoor sports and activities like camping and hiking. The outdoor industry contributes $887 billion in consumer spending and 7.6 million jobs to the U.S. economy on average every year, according to Outdoor Retailer.
Credit Suisse said this millennial shift to the great outdoors will contribute to more money spent at outdoor sporting goods retailers like Sportsman's Warehouse (SPWH - Get Report) . Some other winners could be Columbia Sportswear (COLM - Get Report) , Wolverine Worldwide (WWW - Get Report) and VF Corp. (VFC , which makes Timberland and The North Face.
With millennials having fewer children, Credit Suisse estimated that there will be "lower sports participation" and less purchases of video games. The firm's analysts said traditional sporting goods retailers like Hibbett Sports (HIBB - Get Report) and Dick's Sporting Goods (DKS - Get Report) and video game retailer GameStop (GME - Get Report) could be some of the biggest losers from the birth decline.
Editor's Pick: Originally published May 15.
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