Budget Conscious and Time-Stretched Young Consumers Driving Growth in Restaurant and Travel & Entertainment Sectors

Visa Study Finds “Echo Boomers” Look up to Baby Boomer Generation --- While Baby Boomers Look Down at “Self-Centered” Counterparts

SAN FRANCISCO, July 2, 2007

As Baby Boomers inch closer to retirement, their spending power will be eclipsed by the nation's second largest demographic, young consumers known as Echo Boomers. According to a new Visa USA study, Echo Boomers' spending influence will generate growth in retail categories that help relieve feeling time-stretched, such as restaurants, travel and entertainment. Predictably, as Baby Boomers leave the workforce and age, they will focus their financial resources on medical and dental expenses, gifts for their children and grandchildren and vacations

Visa USA estimates that by the year 2015, the Echo Boomer generation will account for approximately $2.45 trillion in annual spending.

"We are witnessing a watershed moment in our economy's history as one uber-generation transfers their economic influence to another," said Wayne Best, Visa's chief economist. "As Echo Boomers expand as a proportion of the American workforce and mature as consumers, they will continue to spend heavily in service industry retail categories such as restaurants, travel and entertainment."

When it comes to spending, the study also found that Echo Boomers are more likely to listen to their parents, spouses and children rather than members of their own generation. While Baby Boomers tend to rely strongly on their spouse's input, however, they rarely look to their younger counterparts for buying cues.

To better understand this generational shift in spending influence and what that will mean to the future of the U.S. economy, Visa USA commissioned a survey of Echo Boomers (18 to 28 years old; born 1979 to 1989), and Baby Boomers (43 to 61 years old; born 1946 to 1964), entitled "How America Spends."

The second in a series of installments, explores the impact that both group's spending attitudes and behavior will have on various retail categories.

Service Industry Retail Categories to Benefit from Time-Stretched Echo Boomers
"A stable economy and low unemployment rates are making all generations feel time-stretched," continued Best. "For Echo Boomers, this translates into spending in retail categories that will help them accomplish everyday goals and experience life to the fullest."

Echo Boomers cited dining out at restaurants as their second largest expense (45 percent), after housing costs (69 percent) in a given month.
Surprisingly, when asked which of their monthly expenses they should cut back on, 43 percent of Echo Boomers also cited dining out at restaurants. With recent spikes in gas prices, Visa has already seen declines in spending throughout the restaurant sector indicating that consumers are willing to cut back on discretionary items.
Approximately 20% of Echo Boomers said that travel and vacations are a major or moderate expense every month, a considerable portion of their income considering their young age.
If they could reward themselves, 35 percent of Echo Boomers would choose a day off just for themselves followed by going to a special concert or sporting event (22 percent), going out on the town (15 percent), going to a spa (13 percent) and buying new clothes (11 percent).

Baby Boomers Spending in Line with Life Stage
As Baby Boomers begin to age and prepare for retirement, their spending patterns reflect their life stage. In a typical month, Baby Boomers cited medical and dental costs and going out to restaurants as their largest expenses (45 percent and 42 percent respectively), after housing (75 percent). When it comes to splurging, Baby Boomers most often spend on their children or grandchildren (34 percent) and on vacations (16 percent).

Echo Boomers Look to Family for Buying Cues
The study reveals that Echo Boomers, who believe they are facing a difficult economic future, are more open to the influence of family members when it comes to spending.

Echo Boomers said their spouses (70 percent), children (63 percent) and parents (48 percent) had the most influence on their spending, compared to Baby Boomers who primarily rely on their spouses (63 percent), rather than their children (36 percent) or parents (34 percent).
Having grown up in an environment where retirement preparedness is a hot topic, more than 70 percent of Echo Boomers are concerned about having enough money for retirement, a degree of concern similar to the about-to-retire Baby Boomers (78 percent).

Baby Boomers Overlook Echo Boomer's Influence
Although Echo Boomers cite older generations as having an influence on their spending behavior and are more likely to look to their older counterparts for buying cues, Baby Boomers do not hold the younger generation with as high regard.

Only 15 percent of Baby Boomers believe the younger generation is capable of influencing their buying cues, compared to 37 percent of Echo Boomers who believe older generations have an influence on their spending behavior
36 percent of Echo Boomers look to the Baby Boomer generation for cues about what to buy, compared to only 20 percent of Baby Boomers who look to Echo Boomers.
Approximately 68 percent of Baby Boomers believe Echo Boomers are too self-centered and focused upon themselves.
25 percent of Baby Boomers describe the Echo Boomers as an admirable generation compared to 68 percent of Echo Boomers who admire Baby Boomers.

The study also found that both groups are less likely to be influenced by members of their own generation as only 16 percent of Baby Boomers and 22 percent of Echo Boomers say the spending of others their age influences their own spending.

"As we learn more about the spending attitudes and behavior of Echo Boomers, the strategies used to reach and engage this generation will evolve," said Susanne Lyons, CMO, Visa USA. "For marketers trying to capture the hearts and wallets of Echo Boomers, they need to put a greater emphasis on reaching this generation's parents who ultimately influence their purchases and providing services and unique experiences that allow them to enjoy life."

How America Spends
How America Spends was conducted by The Segmentation Company (TSC), a division of Yankelovich, between February 22, 2007 - March 12, 2007. The study included 1,000 interviews (500 Echo Boomers; 500 Baby Boomers) via telephone using random digit dialing (RDD). Survey results are nationally representative, and the margin of error for each generation group is ? 4.5 percent.

To review the "How America Spends" survey, please visit www.visa.com.

About Visa USA
Visa USA is a leading payments brand and the nation's largest payments system, enabling banks to provide their consumer and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders - financial institutions, cardholders and merchants. As of March 31, 2007, in the United States, more than 521 million Visa-branded cards have been issued by more than 13,000 financial institution customers.

Visa products generated $1.8 trillion in total volume in the United States during the four quarters ended March 31, 2007. Visa enjoys unsurpassed acceptance around the globe. For more information, visit www.visa.com/media

About The Segmentation Company
The Segmentation Company (TSC), a division of Yankelovich, is a full-service custom research division conducting research for business, the media, associations, and government. It specializes in studies conducted for media release as well as in segmentation research, positioning studies, brand equity, and market sizing.

Yankelovich, Inc. (www.yankelovich.com) delivers measurable breakthroughs in marketing productivity for it clients. For more than 30 years, the Yankelovich MONITOR has tracked and forecasted consumer value and lifestyle trends. Yankelovich is headquartered in Chapel Hill, NC.

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