Taylor Swift mania sees spending on music events soar, but fails to lift consumer spending

An expected boost from 600,000 Swifties attending the Taylor Swift’s Eras tour last month has failed to offset a broader pullback in household spending, according to an analysis of 7 million CBA customers.

A widely expected economic boost from Taylor Swift’s Eras tour has failed to deliver a windfall for the broader economy, as Australians continue to cut back on spending amid a growing cost of living pressures.

Around 600,000 Swifties attended the seven concerts in Sydney and Melbourne performed by the US pop star in February, contributing to a 76 per cent surge in spending at music festivals, according to an analysis of 7 million CBA customers.

Along with Swift, a number of other musicians touring, including Pink and Blink 182, also resulted in a 115 per cent monthly surge in purchases made at function and event centres.

While Swiftonomics — the term used to describe the positive economic impact of Swift’s performances — was good for venues such as Accor Stadium and the MCG, it was not enough to offset a broader pullback in consumer spending.

The CommBank Household Spending Insights, which tracks month-on-month data at a macro level and is based on de-identified payments data from 7 million CBA customers, fell 0.3 per cent in February to 141.6, slowing annual growth to 3.5 per cent.

Hospitality increased 0.7 per cent for the month as a result of concerts, while fast food and pubs remained positive contributors over a 12-month period at the expense of further easing in purchases at cafes and wineries.

Spending at Taylor Swift concerts was offset by a pullback in household goods and transport, which fell 1.9 per cent and 1.6 per cent respectively.

CBA chief economist Stephen Halmarick said consumers prioritised tickets to see artists such as Swift, with spending up on musical festivals, as well as spending on flights and hospitality venues, likely associated with the headline concerts.

“Taylor Swift did have an impact on spending in February, but it wasn’t strong enough to offset all the losses elsewhere,” he said. “Australians are continuing to reduce their spending. The annual rate of change is moderating.”

CBA’s Stephen Halmarick said Australians pulled spending in other areas to fund purchases made at concerts. Picture: Hollie Adams/The Australian

Mr Halmarick said that the spike in spending at music-related merchants an outlier, but it suggested that Australians were still prepared to spend big for big events such as Swift and were pulling back on spending elsewhere to fund those purchases.

“When it comes to these big social events, people are cutting back on their spending on other items to make room for these big social events,” he said.

“We saw people cut back on basic household goods and a bit of household services to find the money to go and spend on having a bit of fun over the month.”

Despite Swift’s concerts being located in NSW and Victoria, spending in those two states fell in February by 0.3 per cent and 0.8 per cent respectively. Queensland was the only state to see an increase in spending at 0.1 per cent, but it remains below the national growth rate on the year.

Destination NSW had anticipated that Swift’s four concerts in Sydney would inject $80m of visitor spend into the concert, while Business Sydney further anticipates a broader impact, projecting a boost of $133m to the Harbour City’s economy.

Spending at music events was also boosted by P!nk’s stadium concert series across the country. Picture: Kelly Barnes

Household spending was expected to continue to soften in the month ahead as the November interest rate hike takes hold, which Mr Halmarick said was likely to see interest rate cuts from the RBA by September.

He added that the tax cuts due to come into force from July 1 could help lift spending, but were unlikely to do much given households were having to spend more on essentials such as utilities and insurance.

“The second half of the year could see improvement because apart from the rate cuts, we’ve got income tax cuts and inflation will be lower, but those Stage 3 tax cuts will provide some relief, but it won’t be as much of a chance as a rate cut would,” he said.