Consumer spending dropped 6.0 per cent year-on-year in March as measures to tackle coronavirus were introduced.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items rose by 11.6 per cent. Supermarket purchases drove much of this growth, with the category increasing by 21.3 per cent, while fuel saw a 4.2 per cent decline as the roads became quieter.
Spending on non-essentials was down 12.9 per cent, with many retailers impacted by the introduction of social distancing measures. Travel expenditure – which includes public transport – declined by 40.5 per cent, while restaurants and bars, pubs & clubs contracted 35.5 per cent and 22.2 per cent respectively.
Despite the unprecedented challenges faced by UK retailers, there were some bright spots as consumers changed their shopping behaviour. Spending at specialist food and drink stores, such as off licences and greengrocers, grew by 30.5 per cent as more than half (55 per cent) of Brits chose to buy locally and support independent businesses.
The week before tighter social distancing measures were put in place (16th – 22nd March) saw some particularly high peaks in consumer spending, as the nation prepared to spend more time inside.
In a tumultuous month, consumer confidence dropped to its lowest level since Barclaycard started this survey six years ago, with just 25 per cent of UK adults feeling positive about the state of the UK economy – down 17 percentage points from February. Confidence in job security declined 6 per cent to 43 per cent, suggesting concern about the months to come.
However, Brits continue to be resolute about their own financial situation, with 68 per cent remaining positive about their household finances, broadly in line with last month. This could be attributed to the fact that 56 per cent said that they were saving money by avoiding the pub, eating out and commuting less.
Esme Harwood, Director at Barclaycard, said: “The coronavirus pandemic continues to impact everyday life in the UK, and this is naturally reflected in where and how Brits are spending their money.
“It’s no surprise that essential spend has increased as tighter movement restrictions have meant consumers are largely staying indoors, and therefore unable to visit the high-street, socialise in person, or travel.
“However, despite these turbulent times, it’s positive to see that many Brits remain resilient about their own household finances. It’s also heartening to see communities supporting each other – whether clapping for the NHS, checking on vulnerable neighbours or supporting local businesses.”
