Consumer spending declined 16.3% year-on-year in January – the sharpest decline since May 2020 – as the retail, hospitality and travel sectors felt the full impact of national lockdown measures.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 3.9%, bolstered by a 17.0% rise in overall supermarket expenditure, with online supermarket spend seeing significant growth (126.8%). This was driven by a surge in demand for home deliveries, with almost four in 10 (37%) Brits saying they found it harder than ever to secure a delivery slot.
Spending on non-essential items declined 24.2%, as more shops across the UK temporarily closed due to the restrictions. The steepest declines on the high-street were seen at department stores (-36.8%), pharmacy, health and beauty (-27.2%) and clothing (-25.0%).
Spending at physical food and drink specialist stores – which includes butchers, bakeries, and greengrocers –grew (40.5%), as Brits continued to support nearby independent businesses. This comes as 45% say they plan to continue shopping more locally, even after lockdown ends, to support their community.
Consumers have also continued to crave fresh and convenient meal options. In an ongoing trend, ordering takeaways and fast food proved highly popular, with the category seeing its largest ever growth (32.6%). Meanwhile, online food and drink specialist retailers, such as those supplying weekly recipe boxes, saw a significant increase of 92.1%.
The hospitality sector had another very challenging month as Brits’ social plans remained on hold, with bars & pubs, and restaurants recording significant declines of -93.7% and -84.2% respectively.
Despite the slight improvement in travel spending in December, tighter restrictions and news of tougher border controls saw a drop in holiday bookings and overseas trips in January, with travel agents (-87.2%) and airlines (-81.6%) hit hardest.
