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Consumer spending declines 6 per cent in March as coronavirus measures take effect, yet some retailers see strong growth

Wed Apr 15 19:01:00 EDT 2020

  • Spending at supermarkets rose 21.3 per cent and specialist food & drinks stores 30.5 per cent – with the latter up 80 per cent the week before social distancing measures were introduced
  • Travel fell by 40.5 per cent and fuel decreased by 4.2 per cent as Brits spent more time at home
  • Online purchases rose 5.5 per cent while in-store transactions dropped 4.0 per cent
  • Confidence in the UK economy fell to 25 per cent yet more than half of shoppers chose to buy locally to support independent businesses
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

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.

Discount stores also saw increased demand as shoppers sought value for money, rising 25.2 per cent while pharmacy, health & beauty was up 0.5 per cent.

More time at home led to digital content and subscription spend rising 17.4 per cent as people entertained themselves by playing digital games, watching boxsets and accessing streaming services.

Online purchases increased by 5.5 per cent in March, while in-store transactions on the other hand, dropped 4.0 per cent.

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.

Week 16-22 March

Specialist food & drink stores; including off licences and greengrocers

80% increase

Supermarkets

49% increase

Digital and content subscriptions

18% increase

Home Improvement & DIY, including garden centres, painting and decorating stores

17% increase

Specialist retailers, including gift shops and florists as Brits celebrated Mother’s Day from afar

15% increase

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.

A positive side effect of social distancing is the growth in community spirit, with four in 10 (41 per cent) UK adults checking in on vulnerable neighbours to see if they need help with shopping. In another sign of goodwill, 71 per cent chose not to stockpile food, medical suppliers and other essential items so that others wouldn’t be left empty-handed.

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.”

  Spend Growth Transaction Growth
     
Essential 11.6% 4.1%
Non Essential -12.9% -5.1%
     
OVERALL -6.0% -1.7%
Retail 7.3% 5.4%
Clothing -25.2% -24.6%
Grocery 22.1% 10.4%
Supermarkets 21.3% 9.6%
Food & Drink Specialist 30.5% 15.8%
Household -2.7% -0.8%
Home Improvements & DIY -2.5% -0.9%
Electronics 2.0% 2.1%
Furniture Stores -10.0% -9.6%
General Retailers 9.7% 4.3%
General Retailers & Catalogues 18.6% 5.4%
Department Stores -14.8% -11.6%
Discount Stores 25.2% 19.1%
Specialist Retailers -0.8% 3.9%
Pharmacy, Health & Beauty 0.5% 8.7%
Sports & Outdoor -12.6% -18.5%
Other Specialist Retailers 2.7% 3.5%
Hospitality & Leisure -31.8% -18.4%
Eating & Drinking -18.0% -16.1%
Restaurants -35.5% -35.9%
Bars, Pubs & Clubs -22.2% -16.3%
Takeaways and Fast Food -3.0% -10.8%
Other Food & Drink -20.0% -16.2%
Entertainment -35.4% -26.2%
Hotels, Resorts & Accomodation -35.3% -28.5%
Travel -40.5% -21.2%
Travel Agents -47.4% -41.2%
Airlines -41.9% -41.4%
Other Travel -30.4% -19.4%
Other -8.1% 1.7%
Digital Content & Subscription 17.4% 22.3%
Fuel -4.2% -3.2%
Motoring -14.5% -8.5%
Other Services -10.5% -9.0%
     
Online -7.8% 5.5%
F2F -4.8% -4.0%


Notes to editors

* Established in 2014, Barclaycard issues a monthly press release commenting on consumer spending trends.

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The monthly spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 22 February 2020 to 27 March 2020. It is compared with 23 February 2019 to 29 March 2019.

The consumer confidence survey in this press release was carried out between 30th March and 1st April 2020 by Longitude Research on behalf of Barclaycard. There were 2007 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

For more information, please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0)7882 088 493 or Julia Madden at julia.madden@barclaycard.co.uk or on +44 (0) 7788 359 181.  

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2019 we processed over £272bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

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About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. Visit insights.uk.barclays/MCI or email contact-MCI@barclays.com.