Shops, bars and restaurants are expected to see a halo effect as Labour’s election victory and a bumper weekend of sport kickstarts a bounce in consumer spending through July.
Businesses are predicted to benefit from England’s match at the Euro 2024 football tournament and Andy Murray’s Wimbledon swan song this weekend, before the Olympics propels spending at the end of the month.
Hospitality and retail are also forecast to make gains as a result of Keir Starmer’s election victory, as a change in government tends to aid the economy. Consumer sentiment and retail spending improved in the first month after both the 1997 and, to a lesser extent, 2010 elections, according to separate research from analysts at GlobalData and the advisory firm PwC.
Spending will be supercharged by the Euros quarter-final between England and Switzerland on Saturday, which is on the same day as Emma Raducanu and Murray’s Wimbledon doubles match, potentially marking the Scottish player’s final appearance at the tournament.
Football fans are expected to provide the UK economy with a £419.5m boost during the quarter-finals of Euro 2024 – which kick off with Spain against the hosts, Germany, on Friday afternoon – according to research by GlobalData for Vouchercodes, which predicts that 24.8 million Britons will tune in to support the England men’s team.
More than half of those will watch at home, with fans likely to stock up on pizza, crisps and beer, while many head out to bars and pubs.
Tesco said alcohol sales are set “to be brisk”, with the supermarket expecting to sell 3.5m items of beer and cider to wash down 1m packs of sausages and 1.3m punnets of strawberries.
Supporters are also set to consume 13.4m pints in the pub as they cheer on the Three Lions.
With drama on the pitch and in Westminster, it is not clear whether hopeful champagne socialists or optimistic football fans have driven a 36% lift in searches for the sparkling French wine at Ocado this week.
Before the election result, almost 36% of consumers said they would be confident about spending more in the event of a Labour victory, compared with 28% if the Conservatives held on to power, according to GlobalData. The figures are more dramatic for those under 45, with almost 58% of those aged 18 to 24 saying they would spend more if Labour got in.
Kien Tan, a senior retail adviser at PwC, said: “I wouldn’t be surprised if there was a bit of a boost. We have had a year of real income growth, so people should feel a bit more confident to go out. July will get a bit of a halo.
“When the Conservative government came in [in 2010] there was a honeymoon period that lasted about six months before austerity kicked in. Consumers want longer-term certainty and now they know the government will be in place for at least four years.”
He said the new government could benefit from “indicators moving in the right direction”, with cuts in national insurance and the increase in the legal minimum wage and pensions, as well as expected interest cuts.
The retail and hospitality industry is also likely to outperform sales figures registered during a very poor July and August last year, when the weather was cold and wet and consumers favoured spending on watching Barbie and Oppenheimer at the cinema.
after newsletter promotion
Patrick O’Brien, a research director at GlobalData, said: “There is a bit more optimism that retail will do better in the next 12 months than the previous 12 months.”
He said that younger age groups may be feeling particularly positive with “maybe not euphoria but good feeling”, and so those businesses that serve the under-40s may benefit.
The expected mini-boom is partly a reaction to a dip in spending ahead of the election as nervousness about the future prompts households to hold off on major projects.
In 2019, after Boris Johnson was elected, the volume of items sold by retailers in the UK rose more than 6% in the first month after the election, after a 6% decline in the previous month. This year there has been a dip in sentiment since the election was announced, ending a long run of recovery since Liz Truss’s mini-budget sent markets into a tailspin in late 2022, according to GlobalData.
There has been a particular slowdown in big-ticket spending, such as furniture or large household appliances.
However, the weather could be the biggest factor in any short-term spending lift. Tan said pent-up demand for summer gear after a wet May and June could help to drive sales in July and August if the summer is less damp and cold than last year.