Month of two halves as consumer spending growth hits 4.6%

Month of two halves as consumer spending growth hits 4.6%

Consumer spending growth hit 4.6% in July year-on-year, but it was a month of two halves thanks to the weather, according to the latest analysis by Barclaycard.

High temperatures at the start of the month brought consumers out onto the high street and helped drive up spending on clothing, in department stores and on electronics, leading to growth levels of 3.6% and 2.1% in the first two weeks for in-store spend.

But as temperatures dropped below average towards the end of July and a month’s worth of rain fell in one day in some parts of the country, people opted to stay in, causing in-store spend growth to fall in the third and fourth weeks of the month to 1.5% and 0.1% respectively.

Online shopping picked up some of the slack, with consumers spending 18.8% more online when the weather turned – up from 12.3% at the start of the month.

Where shoppers did venture out, they opted for one-stop-shops such as department stores which saw in-store spend growth rise from 5% in the first week to 9.5% in the final week.

Department store spending growth - up 8.8% - reached its highest level in 18 months, only just being pipped by the 9% growth in January 2014.

“The levels of extra spending in both categories firmly point towards strongly-improved trading for the respective sectors, lifting expectations of a strong summer for high-street retailers,” Barclaycard said.

Spending on leisure and entertainment was up 12.8% in July – its highest level this year - helped by a 30.1% jump in cinema spending.

Pubs saw double-digit growth of 15.5% as people took advantage of the fine weather in the first part of the month, but they emptied out as the rains fell with growth nearly halving to 8.7% in the last week. Consumers appeared to stay at home and order a takeaway instead - spending on takeaway food was up 61.4% at the end of July.

Barclaycard managing director, Chris Wood, said: “July was a prime example of how the weather impacts the way consumers spend their money.

“The heat wave that dominated the start of the month provided a lift to the high street – especially clothing and department stores – as consumers took to the shops to update their wardrobes.

“But as the weather deteriorated, winners emerged in different categories including cinema, which was also bolstered by summer blockbusters, and takeaways which consumers turned to avoid the damp and blustery conditions.

“Overall, the rise in discretionary spending in July echoes a six-month trend where consumers, supported by significant tailwinds such as zero inflation, rising wages and clear guidance on interest rates, feel more comfortable splashing out on the nice-to-haves.”

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.

More in News