A magnet for the nation's loose change

A recent study indicates annual spending on the game will exceed £3bn. Diane Coyle reports
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The Independent Online
JUST AS the Great Wall of China is big enough to be seen in satellite photographs, the phenomenon of the National Lottery can be spotted as a bulge in Britain's economic statistics.

According to new official figures, the lottery added about 0.2 per cent to total consumer spending in its first six weeks - equivalent to about £200m in extra spending, and big enough to make a noticeable contribution of 0.1 per cent to economic growth in the final quarter of 1994.

The detailed Henley Centre study reports that on an annualised basis, spending of just over £3bn on the lottery amounts to almost 1 per cent of incomes after essential spending, such as tax and housing costs. This is equivalent to £2.59 a household every week.

Ticket buyers themselves report that playing the lottery is not diverting money away from other purchases. Rather, it comes out of loose change.

This ties in with reports from retailers. James May, director-general of the British Retail Consortium, says: "There is no particular impact on any one type of shop or merchandise."

Different shops have had different experiences. Some find that the number of ticket buyers has cut sales of sweets and magazines, while others say they are getting more customers.

Supermarkets account for about a third of ticket sales; local grocers and confectioners for nearly another third between them.

Mr May says: "There is no uniform view that the lottery is either adding to or subtracting from trade." On balance, he reckons it has not cut other retail expenditure, although the pools and betting shops have clearly suffered.

There seem to be two types of lottery player: the serious gamblers who have diverted some of their spending from the pools or the horses; and 10 million new gamblers who only indulge in the lottery.

There is no firm evidence yet that National Lottery fever has diverted money away from charities or from long-term savings.

The Henley report points out that £1.2bn-worth of prizes have taken the form of £10 wins that people have spent mainly on gifts for family and friends and little treats such as alcohol and confectionery. The other £800m in prize money is most likely to be spent on luxury items - houses, cars, holidays - or be invested.

Just about the biggest noticeable difference the lottery has made to retailers is the fact that 70 per cent of ticket sales occur on Friday and Saturday. For example, Waitrose, which is selling 27,000 lottery tickets a week, sells 40 per cent of them on Saturday alone.

This has tilted other spending towards the end of the week, too. Saturday always used to be the busiest day but accounted for only a quarter of the week's business. On average, shops with lottery terminals now see two-thirds of their trade on Friday and Saturday, and are having to change their staffing and stock patterns to cope.