Scrimp, Splurge, Save: Gen Z's Selective Shopping Habits Are Shaking Up Retail

CAVA +2.27%

Gen Z has proven to be an enigma for retailers when it comes to their shopping habits. They scrimp, save, and splurge in areas that aren't easily predictable, but are perhaps best described as being in pursuit of affordable affluence, according to PwC.

Case in point: several fast casual restaurants, typically popular with younger consumers, have seen a decline in Gen Z visits, while designer brands have seen an uptick in interest among the cohort.

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Scrimp

"The younger cohort, that 25 to 35… they don’t have the steam that they had last year" Cava Group (NYSE:CAVA) CEO Brett Schulman said about Gen Z's visits on the company's Q3 2025 earnings call earlier this month.

Chipotle (NYSE:CMG) pointed to a similar trend.

"A particularly challenged cohort is the 25- to 35-year-old age group," CEO Scott Boatwright said on the company's Q3 earnings call in October. "We believe that this trend is not unique to Chipotle and is occurring across all restaurants as well as many discretionary categories."

Both CEOs pointed to factors like increased unemployment, high student loan repayments, and slow real-wage growth as reasons for the decrease in visits.

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Splurge

Meanwhile, Tapestry (NYSE:TPR), the parent company of Coach and Kate Spade, raised its fiscal 2026 outlook after exceeding its expectations of its Q1 earnings and experiencing 12% sales growth in North America in its most recent quarter.

Tapestry CEO Joanne Crevoiserat told CNBC that much of the company's growth can be attributed to the attraction of new customers, the bulk of whom are Gen Z.

"The Gen Z consumer, specifically, is highly fashion engaged, spending slightly more of their budget on fashion," she told the network. She also said that Tapestry experienced a high retention rate among the age group, "maybe busting a myth that these customers, Gen Z customers, aren't sticky or loyal."

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Save

Still, PwC says that overall, Gen Z appears to be more intent on saving money than splashing out. About 80% of Gen Zers wait to make a purchase until an item goes on sale, while only around 20% are willing to pay full price, according to the firm.

Meanwhile, PwC reports that Gen Z expects to reduce their holiday spend by 23% this year,in its Holiday Outlook 2025 report. This is largely tied to the fact that many in the generation say their financial situation is worse now than it was 12 months ago.

Despite what these findings may suggest, Gen Z hasn't closed the purse strings entirely. Only 28% of Gen Zers said they'd be willing to cut back on high-value items over the next six months to save money. The struggle for retailers, then, becomes identifying what Gen Z deems high value and figuring out how to nudge their offerings in that category, PwC says.

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This article Scrimp, Splurge, Save: Gen Z's Selective Shopping Habits Are Shaking Up Retail originally appeared on Benzinga.com

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