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UK: consumer spending falls by 13.8%

Mar 9, 2021 United Kingdom
UK: consumer spending falls by 13.8%
Figures refer to the month of February as lockdown continued. Spending on essential items grew by 5.3% year-on-year as online grocery shopping surged and on non-essentials dropped by 22.1% with much of the high-street remained closed
According to Barclaycard, which issued its monthly update on consumer spending trends, the UK consumer spending fell by 13.8% year-on-year in February as lockdown restrictions continued. The same data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew by 5.3%. Boosted by food and drink specialist stores – including butchers, greengrocers, fresh food box and meal-kit services – the category saw record growth of 63.3%, 7.5% higher than reported in January. Supermarket expenditure was up by 17.4% overall, with online grocery spend surging 115.2% as many Brits continued to rely on home deliveries for food shopping. Fuel spend, however, declined by 30.2%, as travel restrictions and working from home kept commuters off the roads.   

As much of the high-street remained closed, spending on non-essential items declined by 22.1% year-on-year. The hospitality and leisure sector also had another challenging month, with overall spend down by 68.9% compared to February 2020. Within this category, pubs and bars saw a 95.7% decline, while spending at restaurants fell by 84.6%.

In an ongoing lockdown trend, spending on digital subscriptions and takeaways rose by 42.6% and 30.0% respectively.

Online retailers continued to see strong growth, with online sales accounting for 53.7% of all retail spend in February. Spending at online general retailers, such as online marketplaces and catalogue shops increased by 100.0%, while online specialist retailers saw a 95.9% growth.

Confidence in household finances held up at 68%, with more than two fifths (42%) of consumers saying they have saved more money than usual since the pandemic began. Confidence in the wider UK economy rose by 4.0% from last month to its highest point in the past 12 months (28%).

Raheel Ahmed, Head of Consumer Products at Barclaycard commented: “Despite a very challenging environment, it’s inspiring to see many retailers remaining resilient and doing what they can to maximise online sales while physical stores remain closed. In addition, as we all spend more time at home, we’ve seen home subscription services, fresh food boxes and meal-kit services become a popular mainstay of life in lockdown. The start of Spring, the Government’s roadmap out of lockdown, the vaccine roll-out and the extension to the stamp duty holiday are contributing to a lift in the nation’s spirits. With consumers generally feeling more optimistic, there is a strong indication of a more prosperous period to come as the long-awaited recovery and life after lockdown begins.”

Image credits: Luke Stackpoole on Unsplash

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