MINNEAPOLIS, Apr 06, 2011 (BUSINESS WIRE) --

Piper Jaffray (NYSE: PJC) has completed its 21^st semi-annual "Taking Stock With Teens" survey, which indicates a clear bias toward value brands and, with indications of improving employment, the potential for a recovery in fashion discretionary spending.

"Our survey results continue to reflect stabilization in spending at the upper-income level," said Jeff Klinefelter, director of research and senior research analyst at Piper Jaffray. "Significant discounting, lack of confidence, higher product costs, higher energy costs or a reversal of recent improvements in the employment outlook could create a difficult environment in the second half of the year. While we continue to see a preference for "value" at all levels of household income, teens in general appear willing and able to spend for differentiated merchandise in most consumer categories."

Key survey findings in fashion, beauty and personal care, restaurants, digital media and video game categories include the following:

• Fashion spending from upper-income teens reflected relative stability in total expenditures and improvement in intent to spend, compared to the prior two surveys. For average-income teens, inflation in the cost of non-discretionary categories of food and gas increased these items as a percentage of total expenditures by three percentage points. Of particular note, 41 percent of females indicated they were going to spend more on clothing this year compared to last year, the highest percentage since the fall of 2008.
• Beauty spending trends improved. Upper-income teens spent eight percent more on beauty products compared to the fall of 2010 and two percent more compared to the spring of 2010. The increases reverse the year-over-year decreases noted in the past four semi-annual surveys, and could signal a positive inflection point.
• Survey results on video games reflect a number of key trends, the most pronounced of which is the rapid shift toward digital games, including downloads, mobile and online. Teens are playing more online games and intend to shift habits to more digital game playing during the next year. For existing packaged consoles and handheld games and related software, buying patterns and intent to spend by teens continues to decline. Survey results favor those interactive game companies that offer a broad range of digital content on all connected devices.
• Upper-income teens spent 18 percent of their total expenditures on food and restaurants, up from 16 percent in the fall of 2010, and the highest level since the spring of 2004. Average-income teens spent 15 percent of their expenditures on this category, up from 14 percent in the fall of 2010 and the highest level since the spring of 2005. The data suggests that teens across all income brackets share an ongoing preference for food and restaurant brands that successfully blend premium food attributes with value-centric positioning.
• Teen buying trends in portable devices show the rising popularity of Apple's iPhone and iPod. The market share of iPhone rose to 17 percent, and, in the next six months, 37 percent of surveyed teens intend to purchase an iPhone (up from 31 percent one year ago). iTunes has remained the dominant music provider with 95 percent market share among online music services. Netflix appears well-positioned for increased DVD-by-mail usage and movie streaming, which collectively represents 63 percent of movie rental activity among teens, up from 42 percent two years ago.

The "Taking Stock With Teens" survey is a research project comprised of gathering input from approximately 4,500 students with an average age of 16.5 years. Teen spending patterns, fashion trends, and brand and media preferences were assessed through visits to geographically diverse high schools in nine states, and through an online survey of a wider group of teens from 37 states. The survey is conducted in partnership with DECA (an international association of high school students).

About Piper Jaffray

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SOURCE: Piper Jaffray

Piper Jaffray
Terry Sandven
AnalystMediaRelations@pjc.com