The term most in need of definition is, of course, population aging.
These preferences relate directly to consumer demographic characteristics, such as household type, income, age, and ethnicity. For this reason, it is not only the amount of demand that truly matters to a local economy.
The mix of consumers also has a major impact on a local economy, and therefore must be thoroughly examined in all trade area analyses.
Unfortunately, far too much information often is included in these studies. An enormous amount of data is readily available from a variety of private and public sources, leaving the reader with tables and tables of demographic information overload.
Relevant Data Categories Interpretation of demographic data is often missing in market analysis. What does the data say about how the market is changing and how consumers spend their time and money?
Specifically, what does the data suggest about new business or real estate opportunities downtown? The following provides a starting point in your understanding and interpretation of demographic data in relative to retail spending.
Population is defined as all persons living in a geographic area. Households consist of one or more persons who live together in the same housing unit—regardless of their relationship to each other this includes all occupied housing units Households can be categorized by size, composition, or their stage in the family life cycle.
Typically, demand is generated by the individual or the household as a group. Individual purchases, on the other hand, are personal to the consumer. Anticipated household or population growth may indicate future opportunities for a retailer.
However, further analysis is necessary to identify retail preferences within a community. Household income positively correlates with retail expenditures in many product categories.
Another common practice is to analyze the distribution of household incomes. Discount stores may avoid extremely high or low-income areas. A few store categories, such as auto parts, are more commonly found in areas with lower household incomes.
See the following box for more details on household income.
You need to consider all categories of demographic data when analyzing a market. Gearing a retail mix toward this segment may require a focus in luxury goods and services. High-end department and technology stores, as well as cultural amenities like museums and concert halls, are frequented by the most affluent households within a population.
These households tend to be more frugal and selective in their buying behavior, shopping at discount outlets for groceries and other goods rather than high-end stores.
Big box stores are particularly popular for middle and low-income households.
Families at this income level are living in poverty and thus spend very little on goods and services across the board. Age is an important factor to consider because personal expenditures change as individuals grow older.
Realizing and catering to the needs of an aging population can be beneficial to any retailer. Consumer spending on drug stores and assisted care services flourish in areas with a large elderly population. Accordingly, drug stores often do well in communities with a larger number of people over the age of In general, though, older populations tend to spend less on the majority of goods and services.
Studies indicate that nightlife and entertainment spending restaurants, bars, and theaters by people over 65 is roughly half that spent by those under Older adults also spend considerably less on apparel than other age groups.
On the other end of the spectrum, toy stores, day care centers, and stores with baby care items do well in areas with many children and infants. Some entertainment and recreational venues, such as movie theatres and golf courses, serve a broad section of the population.
Others, such as water parks or arcades, target certain age groups. Education levels also figure into the socio-economic status of an area. Because income increases with advancing educational attainment, many retailers focus on income level rather than education.Despite good economic growth between and , Afghanistan’s poverty rate continues to stagnate.
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With member countries, staff from more countries, and offices in over locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and .