Food and DrinkNews

Consumer Spending Fell 16.3% In January But Takeaway Spending Soars

Consumer spending declined 16.3 per cent 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 per cent, bolstered by a 17.0 per cent rise in overall supermarket expenditure, with online supermarket spend seeing significant growth (126.8 per cent). This was driven by a surge in demand for home deliveries, with almost four in 10 (37 per cent) Brits saying they found it harder than ever to secure a delivery slot.

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 per cent and -84.2 per cent 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 per cent) and airlines (-81.6 per cent) hit hardest at a time when consumers would typically have been making the most of summer holiday bargains. In January 2020, these categories accounted for 10.9 per cent of all non-essential spend – whereas this year they accounted for just 2.2 per cent.

However, some retailers have performed strongly despite the lockdown. Spending on digital content & subscriptions and electronics grew 38.3 per cent and 14.7 per cent respectively, as Brits continued to invest in boxsets and video games to keep themselves entertained during nights in.

Consumers have continued to crave fresh and convenient meal options too. In an ongoing trend, ordering takeaways and fast food proved highly popular, with the category seeing its largest ever growth (32.6 per cent). Meanwhile, online food and drink specialist retailers, such as those supplying weekly recipe boxes, saw a significant increase of 92.1 per cent.

Spending at physical food and drink specialist stores – which includes butchers, bakeries, and greengrocers – also grew (40.5 per cent), as Brits continued to support nearby independent businesses. This comes as 45 per cent say they plan to continue shopping more locally, even after lockdown ends, to support their community.

Amidst the challenging circumstances, just 40 per cent of Brits were confident in their job security this month – dropping 10 per cent from last January to the lowest level in over a year. Confidence in household finances stayed steady at 67 per cent, but younger Brits (18-34-year-olds) are feeling considerably less confident (55 per cent) than the over 55s (78 per cent).

The nation is, however, looking forward to life after the lockdown, with the majority of Brits (57 per cent) most looking forward to spending quality time with friends and family whom they haven’t seen in a while.

Raheel Ahmed, Head of Consumer Products, said: “As the impact of the latest lockdown start to takes its toll, we’ve seen particular sectors struggle, as physical premises across the UK were forced to close. Last month’s glimmer of hope for the travel sector also seems to have stalled as tougher border controls saw bookings drop.

“Yet, on a more positive note, we have seen a surge in many online categories as the demand for home deliveries continues to rise. From meal kits and subscription services, to online grocery shopping, Brits have continued habits they formed in the first lockdown, with a record high seen in spending on takeaways and fast food.

“While confidence in job security has reached its lowest point in over a year, the ongoing vaccine rollout means that Brits believe there is hope on the horizon, and we all look forward to being reunited with much-missed family and friends later in the year.”