UK Gen Z Spending to Drive £26 Billion Retail Boom in 2025

The UK’s Generation Z is set to fuel a £26 billion retail boom in 2025, according to a recent survey by RSM UK and Retail Economics. This surge in Gen Z retail spending highlights the growing influence of younger consumers on the UK retail sector.

The comprehensive survey of 1,500 Gen Z shoppers outlines evolving Gen Z shopping habits that prioritize a blend of saving, experiences, and sustainable purchases. While 34% of Gen Z consumers say they would save or invest a sudden £1,000, many prefer to spend on experiences like travel (14%) over luxury goods (12%), signaling a shift toward value-driven and experience-focused retail trends.

Retail experts emphasize that UK Gen Z spending is far from impulsive. Nearly 95% of Gen Z shoppers describe themselves as budget-conscious and thoughtful in their purchases. This careful approach is reflected in four key Gen Z shopper profiles: “future flexors” who save diligently, “experiential explorers” who prioritize social experiences, “affluent trendsetters” focused on status and style, and “budget loyalists” who seek value amid financial constraints.

The rise of second-hand and sustainable fashion is also reshaping the UK retail market. Gen Z consumers currently estimate that 31% of their wardrobe is pre-loved, driving the UK resale market to £2.4 billion in 2023, with a projected growth of 67.5% by 2026. This aligns with Gen Z’s strong preference for ethical and sustainable shopping choices, contributing to wider retail shifts.

Jacqui Baker, Head of Retail at RSM UK, highlights that while Gen Z is resilient and socially savvy, they remain cautious amid ongoing economic pressures. Their spending patterns reflect a balance between enjoying life and securing their financial future, influencing the broader UK retail forecast for 2025.

The UK retail industry is advised to tailor marketing strategies to capture Gen Z’s unique shopping behaviors. Emphasizing value, sustainability, and personalized experiences will be crucial for retailers looking to benefit from this £26 billion Gen Z retail boom in 2025.

As Generation Z continues to mature, their retail spending power is expected to grow, positioning them as a key driver of future UK retail growth and trends.