How does Generation Z choose their favorite retailers and who are they?

Sam’s Club, Forever 21, Chick-fil-A and Walmart are among the favorites. Where else will they shop in 2024?

Sam’s Club reports a 63% increase in Gen Z membership – the fastest growth of any generation. The frugality of this age group is one possible reason. If so, where else does Gen Z shop?

For post-pandemic Generation Z, clubbing has become more about price than partying, and Sam’s Club is there to cover the entry fee.

In late June, Walmart executives told analysts that Generation Z, or 12- to 27-year-olds (1997 to 2012), is now the largest growth category for supermarket chain Sam’s Club. Memberships in this age group have increased 63% in two years. (Members must be at least 18 years old.) Sam’s estimated to have 70 million members by early 2023, according to PYMNTS.)

According to a report in Retail Dive, memberships among Millennials (1981 to 1996) increased by 14%.

Data from Statista supports this trend: 23% of consumers ages 18 to 28 regularly shopped at Sam’s Club in March 2024, compared to 20% of 30 to 49 year olds and 19% of those over 50.

Consumer analysts say value for money is a big reason. Having survived the Great Recession of 2007-2009, the Covid-19 pandemic and record price inflation, Zoomer consumers are extraordinarily cost-conscious.

But there may be other factors at play here, too. And these factors help determine which other retailers Generation Z prefers.

Summarizing the preferences and habits of Generation Z

Generation Z (many of whom are still under 18) spend an estimated $360 billion annually in the U.S. That’s about $10,600 per household per year, with $33 per trip, reports Numerator.

This shows that they a lot Trips, and they do – 342 per year per household.

On each of these outings, the $33 is spent wisely, as 47 percent of Generation Z earns less than $40,000 a year. This frugality may be why Sam’s Club offered new members for just $25 in early July – half the price of the basic membership.

Other factors also determine where, what and how much Zoomers buy. Only 30 percent have children, for example, which leads to smaller – if not different – shopping baskets, reports Numerator.

Finally, Generation Z intuitively connects online and in-person activities, so they’re quick to adopt in-store technologies that eliminate friction. This includes Sam’s Club’s Scan & Go app. According to Walmart, one in three Sam’s Club members now regularly use the app to skip the checkout line.

How does Costco compare? Read on.

But Generation Z doesn’t just shop at Sam’s Club

Yet Gen Z is buying more than just inexpensive groceries and Sam’s Member’s Mark store brands. Where else are Zoomers shopping, despite their extreme cost-consciousness and reliance on modern technology? Here are some of the latest research findings:

Zooming through fashion

Below are the top four fashion chains for Generation Z in 2023, based on a Statista analysis:

Forever 21: The fast-fashion chain attracts 53% of this age group, suggesting that its low prices and quick digital checkout outweigh Gen Z’s preference for sustainable clothing.
HM: Another fast-fashion brand, H&M, is preferred by 47% of Generation Z. Here, H&M’s sustainability efforts and easy digital shopping options could contribute to its appeal.
Old Navy: 43% of Generation Z appreciate the chain for its prices, as well as its ’90s retro style and gender-neutral selection (it also sells school uniforms).
JC Penney: Surprise! The department store chain attracts 40% of the entire Generation Z. A TikTok feed of its 1990s (read: retro) catalog might have something to do with it.

Also on the list:

Abercrombie & Fitch: Tie with 16^th Place with Belk Department stores, a regional chain. Both receive the thumbs up from 23% of Generation Z.

Primark: The British retailer, which operates few stores in the US and has no US website with shopping options, performs best with 17% of Generation Z, tied with online men’s brand Jack & Jones.

Zara: The Spanish chain with low prices, which has around 100 stores in the US and only a tiny online shop, took last place (20^th). Only 15% of Generation Z prefer it.

Zoom through general merchandise

When it comes to consumer packaged goods and general merchandise, it’s notable that 64% of Gen Z say they “always or frequently” buy private label brands, according to Chain Store Age, and nearly half (51%) choose where they shop based on those brands.

The top three convenience stores where Generation Z prefers to shop, according to the 2024 Numerator report:

Walmart: According to Numerator’s numbers, 21% of Gen Z shoppers say Walmart is their favorite store for gen merch. That’s a smaller share than Gen Z shoppers who shop at Sam’s Club, according to a separate study, but perhaps the club atmosphere feels more like an “adult atmosphere” and the prices are likely better.
Amazon: One in ten Gen Z members buy their goods from Amazon as a default. This might be confusing considering that the sheer amount of choices on Amazon can lead to long shopping trips.
Goal: Only 8% of Generation Z choose Target as their first choice for general merchandise. Still, that 8% is double the number of the general population choosing Target for general merchandise, Numerator reports.

In Zoom through food and drink

Considering they can get a hot dog and drink meal at Sam’s Club for $1.38, it’s no surprise that 42% of Gen Z cite “value for money” as their primary reason for returning to a restaurant, according to the Food Institute.

Their favorite fast-food chains, as listed by Gen Z magazine Woke Waves, include:

Chick-fil-A: The Eat Mor Chikin chain may not beat KFC on price, but IThe quality of the ingredients and the speed can make the difference.
McDonald’s: As you might expect, Mickey D’s is popular for its prices. Generation Z also likes the reliable menu and the many, many locations.
Taco Bell: The chain’s popularity may be due to its innovativeness. Taco Bell often tests creative, TikTok-worthy menu items, including vegetarian options (28% of Gen Z are vegetarian or vegan). Burger Kingwhich offers a plant-based Impossible Whopper, ranks fifth.
Wendy’s: The magazine “Woke Waves” attributes the burger chain’s appeal to Generation Z to unusual social media campaigns and fresh (not frozen) beef.

Where is Starbucks? The coffee chain, which ranks ninth on the Woke list, appeals to Generation Z, but some may find its prices too high. However, there is an opportunity to win them over: As Investopedia reports, Generation Z is still the largest consumer group for specialty coffee in the US.

What about Costco?

Logic suggests that when cost-conscious Gen Z consumers join Sam’s Club, a significant portion of them will also sign up at Costco.

And indeed, 28% of consumers between the ages of 18 and 29 bought groceries at Costco in March 2024, according to Statista. The competing hypermarket club has a total of 128 million members.

What’s unclear is whether Gen Z membership growth at Sam’s Club is outpacing Costco’s. Here’s something that might make the difference: Both retailers sell rotisserie chicken for under $5. Which is better? Hmmm.

Put on your best dad sneakers and head to the club!

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This article originally appeared in Forbes.

Retail Writer at Forbes.com Jenn McMillen is nationally known as the architect of GameStop’s PowerUp Rewards and founder and chief accelerator of firea company that develops and fixes marketing, customer retention, loyalty and CRM programs. Incendio offers an agile, flexible and technology-agnostic approach without the cost structure of large agencies and is a trusted partner to some of the biggest brands in the US