Consumer spending growth hit 4.6 per cent in July year-on-year, but it was a month of two halves thanks to the weather, according to the latest analysis of UK consumer spending 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 per cent and 2.1 per cent 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 per cent and 0.1 per cent respectively.
Online shopping picked up some of the slack, with consumers spending 18.8 per cent more online when the weather turned – up from 12.3 per cent at the start of the month.
Leisure and entertainment
Spending on leisure and entertainment was up 12.8 per cent in July – its highest level this year. It was helped by a 30.1 per cent jump in cinema spending as Jurassic World continued its roaring success and a raft of new summer blockbusters were released.
Pubs and takeaways
Pubs saw double digit growth of 15.5 per cent as people took advantage of the fine weather in the first part of the month, but they emptied out as the rains fell; growth nearly halved to 8.7 per cent in the last week. Consumers appeared to stayed at home and order a takeaway instead – spending on takeaway food was up 61.4 per cent at the end of July.
Chris Wood, Managing Director at Barclaycard, 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.”
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