As Teens Delay Driving, Convenience, Fuel and Auto Industries Miss Out

With fewer young millennials on the road and in stores, retailers reach out to older Millennials.

January 27, 2015

SAN ANTONIO, Texas – According to several recent studies — including the extensive analysis of driver demographics from the past century that the Fuels Institute released last week — today’s teenagers are not in the same hurry to get their driver’s licenses as previous generations. And with the decline in licensed teen drivers comes associated effects such as fewer teens filling up at gas stations and hanging out at convenience stores.

Research shows that many teenagers are postponing the milestone of acquiring their driver’s license in part because they don’t feel the same need as previous generations to shuttle themselves around when they have family and friends who can do it for them. And in many cases, young drivers-to-be simply cannot afford their own vehicle.

In response, some retailers are hoping to offset that decline by attracting the older members of the Millennial generation, who are well into their twenties.

In an interview with the San Antonio Business Journal (SABJ), CST Brands’ senior vice president and chief marketing officer Hal Adams explained the approach that their company is taking to make up for the lower rate of teen customers today. As the largest generation since Baby Boomers, Millennials represent a huge potential audience for convenience retailers. (NACS Magazine covered this significant demographic in the April 2014 cover feature, “Meet the Millennials.”)

"The Baby Boomer generation is trending down in their spending because they're getting ready for retirement," Adams told SABJ. "The Millennial generation has a larger spending palette, so they're a great target customer."

But bringing that customer into the store is not without its challenges, as today’s teens no longer use convenience stores as a place to hang out and meet up with friends, instead preferring to communicate with smartphones or online.

"Teens grow up and become independent at the same time they become spenders," Adams was quoted as saying. "(Older Millennials) are good for our channel because they're willing to explore and try different food flavors and eat in nontraditional areas."

The Fuels Institute tackles the influence of age (as well as gender, labor supply and income levels and other demographics) on fuel demand in its latest report, “Driver Demographics: The American Population’s Effect on Vehicle Travel and Fuel Demand. You can read the report here

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