Taylor-nomics’ has already hit the UK, as new data shows pre-sales for Taylor Swift’s Eras Tour boosted consumer spending in July.
Barclays said consumer card spending was up 4% year-on-year in July, below the rate of inflation and a slower increase than June, as poor weather hit high-street sales.
But leisure spending was a bright spot, boosted in particular by concert ticket sales. Entertainment sales were up 15.8% in July, as Barclays said there were “surges recorded on the pre-release dates for Taylor Swift’s ‘Eras Tour’, and Foo Fighters’ upcoming stadium tour.”
“Despite the rising cost of living, entertainment is a priority spending area for many consumers. One in 10 (11 per cent) is cutting back on other expenses to afford tickets to concerts and movies, while a similar proportion (10 per cent) said they treated themselves to a concert or film ticket in July even though they couldn’t really afford it,” Barclays said.
US economists have noted the effect Taylor Swift tour dates have had on local economies. When Swift played at Philadelphia’s Lincoln Financial Field, the regional Federal Reserve specifically noted that the tour boosted the city’s hotel sector.
But while the boost to demand has been welcome in the US, things might be more complicated in the UK, where supply constraints have meant any boost to demand risks fuelling inflation.
Swift will play three shows at Wembley in June 2024, and a further three in August, as well as three in Liverpool. The Foo Fighters, meanwhile, will play two concerts at the London Stadium in June 2024, as well as dates in Manchester, Glasgow, Cardiff and Birmingham.
Esme Harwood, Director at Barclays, said: “While July’s weather was a wash-out for clothing retailers, it was a ray of sunshine for takeaways and streaming services, which performed better than expected. Entertainment also enjoyed a huge boost, largely thanks to pre-sales for Taylor Swift’s and Foo Fighters’ upcoming stadium tours.
“With value-for-money still a major concern at the supermarket, eagle-eyed consumers are also spotting signs of “drinkflation” – “shrinkflation” on alcoholic drinks. This could be due to manufacturers making changes to their products ahead of the recent changes to alcohol duty, which mean that drinks are now taxed according to strength rather than type.”
Abbas Khan, UK Economist at Barclays, said: “Over the first half of 2023, high inflation rates have weighed on real household disposable incomes and constrained consumption. On the bright side, this headwind is expected to abate over H2 as inflation in essential categories such as energy and food is set to ease.
“However, offsetting this, more households are set to experience higher mortgage costs as they refix onto higher rates. Accordingly, while we do not expect a consumer recession in the coming quarters, growth is likely to be meagre.”