Gen Z is on track to surpass Baby Boomers in global consumer spending by 2029, according to a report by NielsenIQ (NIQ) and World Data Lab. The report, titled "A Tale of Two Consumers: The Polarised Mindsets Reshaping Global Consumption," highlights the generation's rapid spending growth and its potential to reshape markets.
The study, conducted across the US, the UK, Brazil, Saudi Arabia and China, projects that Gen Z's global consumer spending will rise from $5.40 trillion in 2026 to $12.4 trillion by 2036 — a compounded annualised growth rate (CAGR) of 8.68 per cent. By comparison, Baby Boomer spending is expected to grow from $8.30 trillion in 2026 to $9.70 trillion by 2036, a CAGR of 1.60 per cent. While Gen X remains the largest generation in the near term, Gen Z's faster growth is expected to push it past Boomers by 2029.
The report attributes this growth to Gen Z's transition into their prime earning and spending years, as more members enter the workforce and accumulate income. Despite this rising financial clout, the generation remains highly price-sensitive, NIQ said.
"Due to their life stage," Gen Z is highly value-sensitive today, with price playing an outsized role in purchasing decisions, NIQ added. At the same time, the generation remains strongly oriented towards values.
The report identified a gap between what Gen Z says it values and what it actually buys. While sustainability, authenticity and values may be important to the generation, price, quality, convenience and cultural relevance can ultimately determine what enters its shopping basket.
This dynamic is already visible in certain categories. In the US, Gen Z and Millennials are showing higher spending on beauty and personal care, with younger consumers "overtrading" in the category, NIQ said. In health and beauty aids, 57% of Gen Z spending comes from premium products, and the share has increased compared with two years earlier.
NIQ also noted that Gen Z's influence extends beyond its own purchases, shaping culture and influencing household purchases. However, the report highlights categories such as snacks, yoghurt, food and beverage staples, personal care and household essentials where value remains important for Gen Z.
Looking ahead, the report projects that Gen Z's spending power will accelerate as more members enter the workforce. It expects Gen Z to lead growth in affluent spending, while Gen Z and Gen Alpha will lead growth in core spending between 2026 and 2036.
A broader conclusion from the report is that consumer behaviour cannot be explained simply by age or income. Consumers across generations are increasingly switching between premium and value purchases depending on the category, occasion and perceived value. Rising spending power may create room for premium consumption, but price remains a key filter on what actually makes it into the basket.