Read More
Richard Scrope
Fund Manager
The cost-of-living crisis and falling consumer savings is leading to a rethinking of consumers’ spending patterns, however, these changes actually started happening well before the pandemic and the onset of inflation.
The material goods focussed generations have been superseded by the millennials and generation Z, as a percentage of the US population, and these generations are more interested in spending on ‘experiences’ than physical assets.
Mastercard’s claims of a shift to experience spending is backed up by Fiserv’s latest SpendTrend® report which demonstrated how powerful the lure of experiences has become, with leisure and travel being two of the fastest growing sectors; leisure includes sales from gaming, movie box-office, live entertainment and pro sports events.
As Taylor Swift asks ‘is it over now’, her loyal Swifties seem unfazed by paying an amazing average of $3,801 for a resale ticket for the US leg of her latest Era’s tour, despite the average face value being ‘only’ $253.56. It is little wonder that the millennial consumer has little excess cash to spend on electronic items such as PCs, and Taylor Swift is not a one off, with Beyoncé and Harry Styles tickets having average resale ticket prices of over $1,000 on their most recent tours.
Ticketmaster and Live Nation have benefited from these prices while meanwhile drawing disapproval from fans and the US Senate. Despite it being likely that they will have to become more transparent over the pricing of their tickets, demand is such that Ticketmaster commented that Taylor Swift would need to perform stadium shows every night of the year for 2 ½ years to meet the pent-up demand for her tickets. CTS Eventim, the leading ticket selling platform in Europe has seen similar dynamics, with online ticket sales up 35% in the first nine months of 2023, calling out presales for tours by Taylor Swift and Peter Maffay.
Although the 2,321% increase in the average resale value of a Taylor Swift ticket compared to her last tour in 2018 is extraordinary, the average spend on concert tickets have been on the increase for multiple decades, hitting a new high this year, and we believe that this trend is likely to continue.
Despite one Swedish economist accusing Ms Swift as being responsible for the country’s 9.7% consumer-price-index reading in May, and her even getting a mention in the Federal Reserve Bank of Philadelphia’s Beige Book, it is unlikely that demand for tickets and related goods and services such as travel, and accommodation have significant effect on overall CPI; in the UK, concerts, theatre, and cinema account for 0.8% of the 750 goods and services that go into the CPI reading. If not being a large driver for inflation, the spending patterns of Millennials and Generation Z are helping to keep retail sales in positive territory and forcing companies to think about how they can capitalise on part of this new look wallet; even the CFO of Home Depot commented last week on his Q3 earnings call that he had ’noted a shift in budget priorities to experiences, such as vacations and concerts’. To answer Ms Swift’s question, it appears not.
WARNING: All information about the VT Tyndall Global Select Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not