Movies, Pubs Mask Picture of British Consumers Under Pressure
(Bloomberg) -- Hollywood blockbusters and pubs underpinned U.K. consumer spending in October as the retail sector continued to struggle amid waning confidence among households.
Box office hits such as Venom and A Star is Born, along with the release of Glastonbury Festival tickets for 2019, saw ticket sales jump by more than 22 percent from a year earlier, according to a report by Barclaycard on Tuesday.
However, spending on entertainment including drinking and eating out masked a subdued picture overall as Brexit uncertainty and pressure on living standards weighed on sentiment. Just over a quarter of consumers said they have confidence in the economy, the joint lowest reading since at least 2014, while spending on clothing and at department stores both declined.
“Ongoing economic and political uncertainty has led to a decline in confidence,” said Esme Harwood, a director at Barclaycard. “The experience economy provided a welcome boost to overall spending in October with consumers going for meals out and purchasing tickets to events and shows.”
Barclaycard’s findings were reinforced by a separate report from the British Retail Consortium and KPMG, which found same-store sales grew just 0.1 percent from a year earlier.
“Cautious consumer spending continues,” said Helen Dickinson, chief executive officer of the BRC. “Brighter weather and the anticipation of better deals in the Black Friday November sales have dampened demand for discretionary purchases. Moreover, low real-wage growth over an extended period has left consumers with less money in their pocket.”
Here are some of the key findings from the two reports-
- Consumer spending grew an annual 4.4 percent in October, with department stores falling 5.9 percent and clothing down 2.4 percent, according to Barclaycard
- Entertainment helped non-essential spending grow 4.1 percent; essential spending rose 4.8 percent, boosted by auto fuel
- BRC says total retail sales rose 1.3 percent last month from a year earlier
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