Rise Of The SHEconomy Is Good News For These Retailers: Study
Author: Andria Cheng
With the U.S. population of prime-working-age single women growing, a study finds retailers from Nike and Lululemon to TJX and Sephora are poised to be among the biggest beneficiaries of this group’s appetite for spending.
By 2030, 45% of prime-working-age women between 25 and 44 in the U.S. will be single, the largest share in history, up from 41% in 2018, according to a 35-page study titled “Rise of the SHEconomy” by investment bank Morgan Stanley. In total, the single-women population will grow by an average annual rate of 1.2% through 2030, to 77.5 million, compared with a 0.8% growth rate for the overall U.S. population.
Among the total female population over the age of 15, the percentage of single women by 2030 will outpace that of married women and rise to 52%, from 49% last year, according to the study, which was based on Census Bureau data and was released Thursday.
What’s behind that growth? It’s not just that women are getting married later or that the divorce rate among those over 55 is increasing. Never-married women actually represent the fastest-growing segment of the female population, the study finds.
The report shows single women outspend the average household on a per-person adjusted basis in categories including fashion, restaurants and personal care products, putting the retailers with a hold on this demographic potentially in the sweet spot.
“Annual expenditures driven by single women should grow disproportionately to other spending cohorts,” the study says. “The rise in labor force participation and closing wage gap should further influence this divergence.”
Athletic names like Nike, with an increased pitch to women, and Lululemon, which already counts on women for 70% of its sales, are poised to benefit from this trend because both single men and women tend to spend more time exercising than their married counterparts, increasing the need for workout gear, according to the study.
Off-price retailers like TJX, the parent of TJ Maxx and Marshalls, and Ross Stores could also benefit. Women already represent more than three-fifths of their customer base, and single women, who earn less than their married counterparts and are more willing to spend on clothes and shoes, appreciate the name-brand discounts and treasure-hunting environment offered by off-price retailers.
In the restaurant space, fast-casual chains like Chipotle and coffeehouse giant Starbucks, both with women already representing over half of their customer base, should be able to capitalize on the shift. “Starbucks is already popular with women,” the report says. Chipotle has “both a healthier image vs. most limited-service restaurants and relatively high exposure to urban, professional customers. We’d expect this to remain an advantage as single women increase spending power.”
With single women’s spending on personal care products almost equal to the total amount spent by a household with an average of 2.58 individuals, beauty companies Sephora, Ulta Beauty and Estee Lauder—each of which already counts on women for over 75% of its business—are poised to be among the beneficiaries.
Beauty products will likely see among the biggest boosts in demand as Gen Z, which spends more on makeup than any other generation did at the same age, grows into its prime spending years, the study says.