Demographic Factors (AQA A Level Business) : Revision Note
The main demographic factors
Demographics means the number of people and the mix of ages, genders, backgrounds and locations
In mid-2023 the UK had almost 68 million residents
Almost one in five were aged 65+
One UK adult in six has an ethnic-minority background
Two-thirds of people live in urban areas
Demographic trends in the UK
An ageing population
Over-65s will make up more than 20% of the population by 2028
The grey pound is increasingly important to the UK economy
Care-home beds, stair-lifts and 'silver' holidays (e.g. Saga cruises) have all experienced demand growth
Forecast UK population pyramid in 2028
Slow birth rate
UK births fell below 600,000 in 2023, the lowest on record
In recent years, leading brands such as Mothercare, Mamas and Papas and Early Learning Centre have disappeared from UK high streets
Net inward migration
Net migration was around 700,000 in the year to June 2024
More UK residents has increased demand for rental housing, language classes and budget retail chains like B&M
Greater ethnic diversity
Asian communities are the fastest-growing group, making up 9.3 % of the UK population
This can created demand for products such as bubble-tea bars, K-beauty skincare and Diwali gift ranges
Urban concentration
95% of the population in England and Wales, live in cities, towns and large villages
Demand has soared for rapid grocery apps and grab-and-go meals such as Pret a Mangers’s 10-minute delivery
How demographic factors affect costs and demand
Demographic change alters who buys and what it costs to serve them
Businesses track age, birth rates, diversity, migration and urbanisation alongside economic data
Demographic factors and costs
Changes in demographic factors can have a significant impact on business costs
Factor | Explanation |
|---|---|
Not enough workers in some sectors |
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High city rents |
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Design changes for older customers |
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Communicating with diverse audiences |
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City delivery costs |
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Demographic factors and demand
Changes in the structure of the population impacts the products customers demand
Factor | Explanation |
|---|---|
More people aged 85 + |
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Fewer babies being born |
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A more diverse population |
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Most people live in towns and cities |
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High net migration |
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