Blockbuster movies and holiday flights drive rise in consumer spending
Consumer spending grew by a modest 1.7% in July, as it was boosted by high ticket sales for summer blockbusters, according to Barclaycard.
Big cinema releases and a surge in holiday flights pushed consumer spending higher in July, although retail spending continued to plunge.
Consumer spending grew by a modest 1.7% in July, as it was boosted by high ticket sales for summer blockbusters including Toy Story 4 and The Lion King, according to Barclaycard’s latest consumer spending report.
Spending was also boosted by a raft of holidaymakers buying flights, as airline expenditure bounced back from three consecutive months of decline to grow by 3.7%.
However, the figures remained subdued and represent a decline in real terms when accounting for inflation.
It is the third consecutive month of muted growth, following similar spending figures for May and June this year.
The data from the credit card giant revealed that spending on essential items contracted by 0.9%, as 0.7% less was spent at supermarkets and spending declined by 2.4% at petrol pumps.
However, consumers spent more on non-essential items, which saw growth accelerate to 2.4% as it was bolstered by demand for entertainment and leisure during the summer.
Following the release of a string of blockbusters in cinemas, ticket sales reported strong growth of 14.8%, Barclaycard said.
There was also a significant uplift for the UK’s embattled dining sector, as restaurants saw a 10.1% increase in sales as they were buoyed by warmer weather.
Pubs also saw an increase in spending, although growth of 5.6% was significantly slower than July in 2018, which saw spending jump 16.8% on the back of World Cup fever.
Travel spending also rose, up 2.6%, as it was buoyed by the increase in flight sales.
However, retail spending continued to struggle as the report highlighted a decline in consumer confidence.
Just 29% of people surveyed said they felt positive about the state of the UK economy, while 23% of people said they are uncertain about their job security, the highest figure for two years.
Esme Harwood, director at Barclaycard, said: “Spending has remained relatively subdued over the past few months, with an underlying uncertainty about the wider economic and political landscape causing many to hold off making purchases on bigger ticket items.
“However, on a brighter note, box office hits such as The Lion King and Toy Story 4 have helped boost spending as consumers continue to prioritise dining out and enjoying trips to the cinema and theatre this summer.”