UK's Gen Z to drive $35 bn retail boom in 2025: Survey

Gen Z consumers are far more financially prudent than often perceived, with many prioritising savings and long-term goals over impulsive purchase, revealed the survey by RSM UK and Retail Economics.

A third (34 per cent) of respondents said they would choose to save or invest an unexpected £1,000 (~$1,350) windfall rather than spend it. When they do spend, experiences outrank possessions—around 14 per cent of the windfall would go towards a major trip or event, compared with 12 per cent for luxury goods.

The findings also showed that Gen Z cannot be defined as a single, uniform generation but rather as four distinct cohorts. Future Flexers (43 per cent), the largest segment, are pragmatic and ambitious, focused on building financial security. Experiential Explorers (24 per cent) value balance and social experiences. Trendsetters (17 per cent) are the most affluent and image-conscious, influencing wider Gen Z aspirations. Budget Loyalists (16 per cent) are the youngest and most financially constrained, practical and value-driven, ensuring every pound is wisely spent.

Jacqui Baker, head of retail at RSM UK, said: “Gen Z are often socially savvy, resilient and disciplined shoppers who take a pragmatic approach to spending. However, this age group isn’t sheltered from current cost pressures, so saving for the future ultimately comes first. This chimes with the bigger picture, with the household saving ratio increasing to 10.7 per cent in Q2 2025, showing consumers are taking a more cautious approach across the board.

“Our findings challenge the common assumption that Gen Z only live for the moment. Instead, Gen Z are far from reckless and have a strong instinct to plan ahead, while prioritising experiences and social occasions. With many still living at home or renting, it’s likely that getting on the property ladder is a priority, so if they’re to part ways with their money, the purchase must align with their priorities and deliver long-term value.”

Richard Lim, chief executive at Retail Economics, added: “Gen Z are diverse, and their behaviours, expectations and purchasing decisions vary widely, so taking a ‘one size fits all’ approach will fail. Gen Z already represent a significant share of retail spending, and their influence is only set to grow as incomes rise, so recognising the differences within this generation is key to staying relevant in the future.”

“To avoid missing the mark with this spending powerhouse, retailers must focus on winning the trust of these consumers, while capturing loyalty through relevance, authenticity and innovation,” concluded Baker.

ALCHEMPro News Desk (SG)