Gen Z Embraces 'Doom Spending' With 21% Surge In Holiday Purchases, Driven By Stress And Pessimism

A new report from the consulting firm Simon-Kucher reveals a striking surge in holiday spending among Generation Z, a demographic defined as individuals born between 1997 and 2012.

The study has coined the term "doom spending" to describe a growing trend where young consumers are spending more than they can afford, often as a coping mechanism for stress and anxiety driven by negative online content and a pessimistic outlook on the future.

The report, which surveyed 1,000 U.S. consumers, found that Generation Z plans to increase their holiday spending by approximately 21% compared to last year. This stands in stark contrast to other generations: Millennials (born 1981–1996) intend to spend 15% more, while Generation X and Baby Boomers expect to spend only 5% and 6% more, respectively.

Shikha Jain, a partner at Simon-Kucher who contributed to the report, emphasized that "doom spending" is more than just impulse buying or retail therapy. It represents a deeper emotional response to a turbulent world. Jain explained that young consumers, particularly those in Gen Z, are increasingly turning to shopping for short-term relief from the stress of daily life. "It involves impetuous purchases that offer short-term delight but can cause long-term financial strain," Jain told USA Today.

Doom spending refers to the growing trend of individuals or governments increasing their expenditures in ways that prioritize short-term satisfaction over long-term stability, often leading to unsustainable financial practices. This phenomenon has been observed across various sectors, where immediate desires or needs are met without fully accounting for future consequences. As a result, concerns are rising over the potential risks of such spending habits, including mounting debt and diminished resources for future generations.

The rise of doom spending is linked to several factors, including the constant barrage of negative news and geopolitical crises that younger generations are exposed to through social media and other digital platforms. Unlike previous generations, Gen Z has grown up in an environment filled with economic uncertainty, political unrest, and global challenges, contributing to their heightened sense of anxiety.

Doom spending refers to the growing trend of consumers and businesses prioritizing short-term purchases and investments while neglecting long-term financial stability. This phenomenon has been observed as individuals focus more on immediate gratification, often at the expense of saving or planning for future needs. It has been linked to a variety of factors, including economic uncertainty and rising living costs, which prompt people to spend aggressively in the present rather than prepare for potential future challenges.

Social media plays a significant role in shaping the spending habits of younger consumers. Many Gen Z shoppers are turning to platforms like Instagram for purchasing inspiration. The influence of social media, combined with the growing popularity of "buy now, pay later" services such as Afterpay, has made it easier for young people to overspend, despite financial constraints.