'Grey market' set to boom

Spending power is shifting from young families to older people

The UK's over-45s make up an increasingly affluent sector whose tastes must be catered for by companies, according to London-based consultants Business Strategies.

Melanie Lansbury, economist at Business Strategies, said: "The service sector - providing anything from holidays to healthcare and car repairs to catering - needs to understand the spending power of these 'grey' consumers fully and be able to meet their requirements.

The importance of the grey market can no longer be overlooked

Melanie Lansbury
Business Strategies

"Across the UK today the number of greys is increasing all the time."

She said the "grey market" of 23 million people aged over 45 years had so far been largely unexploited.

"With the obvious exception of Saga, most companies in the leisure and entertainment industries have tended to target the younger population, couples and families," she said.

"The same applies in some parts of retailing, particularly fashion.

"But with the population ageing and the wealth of greys increasing, the importance of the grey market can no longer be overlooked."

The report shows that 10 years ago, 21 million people in the UK were over the age of 45.

In 10 years' time this will have risen to 26 million.

Nearly a fifth of the population - some 12 million people - will be past retirement age in 2010.

Spending power

Miss Lansbury says that within the overall category of "grey" there are various important sub-divisions, such as working and retired.

Working greys spend an average of £9 a week more on leisure services than average households, while weekly spending by retired greys is £3 a week below the average, although it is growing fast.

The report says non-working greys are more likely to use services during slack periods and some organisations have already recognised this with lower charges in off-peak times.

Working greys spend 25% more on motoring than the average household, 15% more on household and leisure goods and personal goods and services and 8% more on household services.