← External Forces: Demographic, Consumer & Market (all topics)
Nuclear families & smaller households
What it is
The break-up of joint families into smaller independent households. Average household size is falling, so households grow faster than population
Each new household needs its own home, wiring, appliances, cooking fuel, water connection and furniture
Impact on industries
- Household formation rather than population growth is the demand unit for housing, durables, paints, pipes and packaged goods
- Per-capita spending rises as fixed household costs are shared across fewer people, and decisions are made by younger buyers
- Smaller households buy smaller pack sizes more often, which suits organised retail and quick commerce better than bulk buying
- It raises housing demand precisely where land is most expensive, which is why affordable supply is thinnest in the strongest markets