The 'Char' data type is used to store a single character, such as a letter, number, or symbol. Given that a single character (the customer's first initial) needs to be stored, 'Char' is the most efficient and suitable data type. Using 'String' could also store a character but is more appropriate for multiple characters, which in this case is unnecessary and would not be as space-efficient. 'Integers' are used for whole numbers and 'Floats' for numbers with decimals, making them incorrect choices for storing a single character.