“Nesting”…Retailers Have A Gen Z Problem

MoneyInvesting“Nesting”…Retailers Have A Gen Z ProblemByGreg Petro,Contributor.Follow AuthorApr 28, 2026, 10:18am EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.“Nesting”…Retailers Have A Gen Z ProblemgettyAn American aspiration for generations since at least the end of World War II, home ownership has become a luxury that most people under the age of 30, Gen Z, can only dream about – if they even do. Evidence is mounting that many in this emerging generation of consumers are content to rent and spend their spare money on themselves – on looking and feeling good and having authentic experiences.This trend is a looming challenge for retailers in the home improvement and furnishing industries whose fortunes ebb and flow with real estate cycles. Everyone seems to agree that, for most, shelter has become unaffordable. Given all the circumstances at home and abroad, no one seems to think there will be a turnaround anytime soon.Sales volumes of existing homes have fallen by about 40% since 2020 and 2021, when thousands of urban dwellers fled the cities and unleashed a “nesting” spree. From sofas to granite counters to grills and mowers, the industry flourished.That short boom is now a fading memory. Over the past four years, Lowe’s annual revenue has shrunk by 10%. Home Depot has managed to hold the line on revenue, but its profit margins have narrowed by about 20%. Wayfair, a major e-commerce furniture merchant that became an overnight sensation in 2020, has posted revenue declines in four of the past five years, racking up $4.8 billion in red ink along the way. Numerous smaller furniture retail chains have gone bankrupt. Even IKEA, which had notched a two-decade run of positive sales growth before 2020, has recorded three down years out of the last six.MORE FOR YOUThe current retrenchment begs for comparison with the crash of the housing market that began in 2008 and lingered for many years. In that cycle, it was in large part the Millennial generation that drove the turnaround – an army of first-time home buyers in their 20s and 30s who were busy building careers, marrying, and giving birth to an army of Gen Z children.That was then. This time is very different. Gen Z will not be rescuing the housing industry anytime soon. For starters, either by choice or necessity, close to half are still living with their parents, according to U.S. Census Bureau data from 2024. The kinds of living-wage jobs their parents were able to get in the 2010s are gone or going, courtesy of AI.But even if Gen Zers had the jobs to pay for weddings and houses and the stuff (and babies) to fill them, it’s not clear they’d be in a big rush to settle down just yet. As we’ve noted here, young adults are spending more of their discretionary dollars on wellness and experiences than they are on stuff. When they are in a “nesting” mood, Zers are likely to start their shopping journey at a thrift store, an online resale site, or a Habitat for Humanity Re-Store. if (!window.cnxel) { window.cnxel = {}; window.cnxel.cmd = []; var iframe = document.createElement('iframe'); iframe.style.display = 'none'; iframe.onload = function() { var iframeDoc = iframe.contentWindow.document; var script = iframeDoc.createElement('script'); script.src = '//cd.elements.video/player.js?cid=62cec241-7d09-4462-afc2-f72f8d8ef40a'; script.setAttribute('defer', '1'); script.setAttribute('type', 'text/javascript');…

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