'Discretionary Recession' in Teen Spending Detailed in 15th Semi-Annual Piper Jaffray 'Taking Stock With Teens' Study
April 09 2008 - 8:37AM
Business Wire
Total teen spending on fashion declined nearly 20 percent on a
year-to-year basis, indicating a �discretionary recession,�
according to the 15th semi-annual �Taking Stock With Teens�
research survey, recently published by Piper Jaffray. The national
study was conducted by senior research analyst Jeff Klinefelter and
a collaborative team of research analysts to determine purchasing
behavior and brand preferences among teens. Through mall research
field trips and classroom visits in 11 cities across the United
States, the team surveyed nearly 700 students using in-class,
online and in-store surveys this spring. Piper Jaffray also
captured an additional 4,500 online survey responses through the
national DECA organization, which partnered with the retail
research team for the seventh time. According to the survey
results, total spending trends were weakest for young men with a 15
percent year-over-year decline versus an 11 percent year-over-year
decline for juniors (young women). While the fashion category
represents 41 percent of the total teen budget in the spring 2008
survey and teenagers continue to spend a significant amount of
money in this category, the Piper Jaffray retail research team
notes this budget allocation is low compared with the past several
years. �We�re currently in the �transition phase� of the fashion
cycle and believe that we have not yet hit bottom,� said Jeff
Klinefelter, senior retail research analyst at Piper Jaffray. �The
current economic challenges are impacting consumers at all income
levels and ages, indicated by the historic low level of average
planned spending in the fashion category this spring.� Key findings
from the survey in the fashion, beauty and personal care, home
furnishing, video game, digital media and restaurant categories
also include the following: The top five brands among all students
in the school survey remain largely unchanged from last fall.
Hollister remains the No. 1 preferred brand by teens, as ranked by
mindshare, followed by West Coast Brands (e.g. Pacific Sunwear,
Volcom, Quicksilver, Zumiez), American Eagle, Abercrombie &
Fitch and Forever 21. Specifically among brands ranked by girls,
Hollister maintained its �most preferred� position, while West
Coast Brands continue to resonate as a favorite among young men. A
bright spot in consumer spending trends points to an increase in
spending from the fall 2007 results among teen girls in the beauty
category. Overall, spending by parents was down in both the apparel
and beauty categories. In addition, privately-held, Swedish-based
IKEA was the top choice among teens followed by Pottery Barn/PB
Teen in the home furnishing retailer or cataloger category. By
gender, electronics represented 10 percent of total budget for
young men and 4 percent for juniors this spring and 7 percent
overall, up slightly from 6 percent last year. Spending in the
video game system category increased significantly for young men to
13 percent from 9 percent last fall. In the digital media category,
86 percent of the students who own an MP3 player indicated that
they also own some form of an iPod, which is an increase from 82
percent last spring. Although iTunes continues to dominate market
share at 81 percent, 61 percent of the students surveyed indicated
they download music illegally, compared to 64 percent at this time
last year. In addition, 6 percent of the students surveyed indicate
they own an Apple iPhone, which is double the market share found in
the fall 2007 survey; 9 percent expect to buy an iPhone in the next
six months. Starbucks continued to be the clear brand leader across
the board in both the school and online survey. Premium coffee is
potentially a growing category among teens as Dunkin�s Donuts
appeared in the top ten brands for the first time in the school
survey. Chipotle and McDonald�s remained in second and third places
in the school survey, while Olive Garden and Applebee�s remained in
second and third in the online survey. However, Chipotle continues
to gain teen market share, ranking among the top ten brands in the
online survey for the first time. In total, approximately 45
percent of the students surveyed believe they have spent more money
this year at restaurants than last year. Piper Jaffray also polled
more than 75 parents on the amount they spend either on themselves
or their teens. Parents indicated that annual spending on teen
apparel totaled $883 versus $1,487 in the spring 2007 survey, a 41
percent decline on a year-over-year basis. In addition, the survey
results show parents� annual spending on their apparel was down 24
percent from last year, totaling $952 versus $1,249 last spring.
About Piper Jaffray Piper Jaffray Companies is a leading,
international middle-market investment bank and institutional
securities firm, serving the needs of middle-market corporations,
private equity groups, public entities, nonprofit clients and
institutional investors. Founded in 1895, Piper Jaffray provides a
comprehensive set of products and services, including equity and
debt capital markets products; public finance services; mergers and
acquisitions advisory services; high-yield and structured products;
institutional equity and fixed-income sales and trading; and equity
and high-yield research. With headquarters in Minneapolis, Piper
Jaffray has 25 offices across the United States and international
locations in London, Hong Kong, and Shanghai. Piper Jaffray &
Co. is the firm's principal operating subsidiary. (NYSE: PJC)
(http://www.piperjaffray.com) Since 1895. Member SIPC and FINRA. �
2008 Piper Jaffray & Co., 800 Nicollet Mall, Suite 800,
Minneapolis, Minnesota 55402-7020
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