October Consumer Spending Drops By 0.1% As Brits Embrace Takeaway

Consumer spending declined 0.1 per cent year-on-year in October, as the introduction of further restrictions and the arrival of colder weather encouraged Brits to stay at home and turn to online shopping. Spend on digital content saw its highest uplift (32.3 per cent) since the first national lockdown eased in July, while takeaways stayed strong at 18.3 per cent growth.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 4.2 per cent year-on-year, steadied by a 13.9 per cent rise in supermarket expenditure – though this was the smallest increase in the category since February 2020.

Spending on non-essential items declined 1.7 per cent, compared to the 0.6 per cent growth seen last month. Clothing fell 2.7 per cent overall, though a 20.6 per cent growth was seen in online clothing as the nation chose to shop from home instead of venturing to the high street. Spending at department stores also contracted by 9.9 per cent, down from the smaller 0.2 per cent decline seen in September.

Home deliveries remain popular as online supermarket expenditure saw 94.4 per cent growth, accounting for 13.7 per cent of total supermarket spend compared to 13.0 per cent last month. This comes as a third (33 per cent) of Brits say they are stockpiling essentials in preparation for potential shortages.

However, boosted by early Christmas shoppers, general retailers and catalogues saw growth of 50.0 per cent in October. Food and drink specialist stores, including butchers and greengrocers, also rose by 50.7 per cent as nearly half of shoppers (48 per cent) looked to support local businesses.

As the winter months approach, more time spent indoors also meant more hours browsing the internet. Overall online transactions grew by 29.0 per cent in October, accounting for 45.7 per cent of all retail spend this month – a steady rise from August (44.0 per cent) and September (43.4 per cent).

The restrictions are impacting consumer optimism, as household confidence dropped to 67 per cent – a level not seen since May (also 67 per cent) and down from 70 per cent last month. Confidence in the UK economy also remains low (22 per cent), with less than half as many over-55’s (15 per cent) as 18-34-year-olds (34 per cent) feeling confident.

Raheel Ahmed, Head of Consumer Products, said: “As Brits once again adjust to tighter restrictions, it’s no surprise that the digital habits adopted earlier this year are enduring. As we enter another period of lockdown in England and further restrictions across the UK, this stay-at-and home mentality is likely to persist, as is the popularity of takeaways and digital subscriptions – helped along by the colder weather and darker evenings.

“As the country prepares for a winter under potentially tighter restrictions, and we turn to online for our Christmas shopping, the resilience of bricks-and-mortar retailers will be tested as we wait to see what the rest of the year brings.”

 

October Consumer Spending Drops By 0.1% As Brits Embrace Takeaway, October Consumer Spending Drops By 0.1% As Brits Embrace Takeaway