Why pubs and restaurants are re-targeting the grey pound
Forbes Mutch, editor-in-chief of Chain Leader UK, assesses recent moves by chain operators to woo the Babyboomers
The colour of money means everything to marketing executives. They talk about the pink pound (gay consumers), the brown pound (ethnic minorities), the green pound (eco-shoppers) and, if you pardon the pun, the oldest of them all, the grey pound.
The grey pound describes the money spent by consumers over the age of 50. It was a term coined in the 1970s and it became a bit of a cliché. So much so that, a few years ago, advertisers and businesses decided it was a market too untrendy to target overtly. The emphasis in the future-fixated Millennium era was on teenagers and Generation Y.
But no more. Those conspicuous consumers born between 1947 and 1961 - the so-called Babyboomers, the next wave of grey pound spenders - are making a comeback. They are reappearing in the strategic business plans of corporate leisure companies.
When The Restaurant Group (TRG) paid CI Traders £27m for its Bluebeckers restaurant chain recently, TRG chairman Alan Jackson said that the purchase had broadened the company's customer base by giving it an entrée into the grey market.
"This is a market that has got more money and more time on its hands," he said. "They're the sort of people who like to drive out to the country to a nice location where they can park easily and have a good quality meal in relaxed, pleasant surroundings."
The Bluebeckers chain, which includes 12 Bluebeckers suburban pub-restaurants and five Edwinns Brasseries, fits neatly into the TRG portfolio, counterbalancing its more urban Garfunkel's and Caffe Uno high-street and airport brands.
TRG is not alone in targeting the new-wave grey pound, however. Other restaurant and pub groups have also placed the market sector in their sights.
Mitchells & Butlers, for example, maintains that its Vintage Inns have long been favourite venues with the over 50s and 60s. The Vintage locations are often rural or semi-rural and they cater for the mid-spend, destination diners described by Jackson.
It makes good business sense to reconsider older customers, as they are clearly going to grow as a demographic grouping.
According to the Government Actuary's Department, about 9.6 million people, or 16% of the UK population, is aged 65 and over. By 2025, it is estimated that this figure will be closer to 14 million and by 2050, it will be more like 17 million, or a quarter of the entire population.
According to Professor Thomas Cullen of the Hotel School at Cornell University in New York, these are the people who have disposable income and are prepared to spend it on themselves. "In the USA, the older generation and the Babyboomers spend $2 for every $1 spent by younger householders," he says.
So Jackson has probably got it right. On the other hand, a word of warning is sounded by Martin Hayward, former chairman of the Henley Centre research consultancy. He says that the Babyboomers are coming increasingly under pressure from two directions - top and bottom.
He says that high property prices are forcing more children to stay at home longer, often returning to their parents' home after leaving university, while people are living longer, which means that the parents of Babyboomers need support from their own children for longer. "Babyboomers are the ones caught in the middle," he says.
But that won't put off the pubs and restaurants that are looking at the old grey pound as a potentially rich market again. And who knows, if the Babyboomers are going to be forced to take their children and their parents out with them, perhaps it will force operators to think more about genuine family restaurants, rather than one-generation eateries.
