Ticket sales for the Oasis reunion tour helped to increase non-essential spending by British consumers to the highest level this year in September, amid a bumper month for retailers.
In a sign of resilience despite a pre-budget hit to consumer confidence, industry figures show retail sales and discretionary spending on entertainment, meals out and little luxuries rose sharply last month.
Consumer card data compiled by Barclays showed the fastest growth in non-essential spending this year in September, with a 2.7% year-on-year increase. It said this was helped by a 36% annual jump in spending on shows and concerts, fuelled by Oasis fans scrambling to buy tickets for the Gallagher brothers’ reunion.
Separate figures from the British Retail Consortium (BRC) show total UK retail sales rose 2% year on year, above the three-month average, as shoppers hit the high street and went online to buy clothes and computers for the new academic year.
Helen Dickinson, the chief executive of the BRC, said: “Retail sales saw the strongest growth in six months as non-food performed better than expected. As autumn rolled out across the UK, shoppers sought to update their wardrobes with coats, boots and knitwear.”
However, she warned concerns still remained over the financial outlook as households held back on buying big-ticket items and white goods, amid pressure on family budgets as living costs remained high.
The figures come after surveys showed a sharp drop in consumer confidence last month amid concerns over the government’s plans for a “painful” 30 October budget, risking a hit to the economic recovery from the cost of living crisis.
Households are facing higher energy bills after the lifting of the Ofgem energy price cap at the start of October, driving up average bills by £149 a year. The government has also cut winter fuel payments for all but the poorest pensioners, and the chancellor, Rachel Reeves, has warned further tax and spending changes will be required to repair the public finances after inheriting a challenging fiscal position from the Conservatives.
Dickinson said action to support the retail sector was required before the crucial “golden quarter” festive shopping season. “In the face of weak consumer confidence and the continued high burden of business rates, retailers’ capacity for further investment is limited. As a result, retailers are holding their breath ahead of the budget,” she said.
It came after more than 70 retailers, including Tesco, Marks & Spencer and Ikea, lobbied the chancellor for a 20% cut to business rates in a letter published on Monday, warning that the property tax could force tens of thousands of shops to shut.
The Federation of Small Businesses called on Tuesday for an increase in business rates relief to support economic growth. Tina McKenzie, the policy chair of the FSB, said: “A decisively pro-small business budget is the first and best chance for the chancellor to secure sustainable growth by the end of the parliament.”
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Barclays, which processes about 40% of all consumer card spending in the UK, said spending on essentials in September fell by the most year on year (-1.7%) since April 2020.
However, the latest snapshot indicates consumers are prepared to prioritise some spending despite the financial pressures, including a bumper month for clothing sales in readiness for the colder winter months.
Linda Ellett, the UK head of consumer, retail and leisure at KPMG, which helps to compile the BRC figures, said: “With record rainfall levels in some counties, the cold and wet weather in September sped up purchases of extra layers and wet weather gear.”
Barclays said retailers’ discounting incentivised some areas of spending, helping to increase sales of clothing, health and beauty items, and department store sales.
Karen Johnson, the head of retail at Barclays, said: “While shoppers remain cost-conscious, it’s clear they’re responsive to retailers’ promotional activity. Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy.”