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October sees consumer spending decline by 0.1 per cent as restrictions and colder weather encourage Brits to stay indoors

09 Nov 2020 19:01

  • Spending on essential items grew 4.2 per cent, bolstered by continued growth in supermarket spend as the category saw an online uplift of 94.4 per cent
  • Food and drink specialist stores – including butchers and greengrocers – rose by 50.7 per cent as nearly half of shoppers looked to support local businesses
  • Digital content and subscriptions experienced its highest uplift since July, as the longer nights saw the nation dine in with takeaways and box setsThe Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

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.

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).

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, as many embraced dining in with a box set.

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-home mentality is likely to persist, as are 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.”

  Spend Growth Transaction Growth
     
Essential 4.2% -6.7%
Non Essential -1.7% 2.5%
     
OVERALL -0.1% -0.9%
Retail 17.2% 6.5%
Clothing -2.7% -8.5%
Grocery 17.0% 0.7%
Supermarkets 13.9% -2.9%
Food & Drink Specialist 50.7% 27.8%
Household 18.6% 16.8%
Home Improvements & DIY 22.5% 27.2%
Electronics 12.4% 9.2%
Furniture Stores 19.4% 6.9%
General Retailers 30.7% 28.8%
General Retailers & Catalogues 50.0% 51.3%
Department Stores -9.9% -14.1%
Discount Stores 30.7% 11.9%
Specialist Retailers 13.0% 1.5%
Pharmacy, Health & Beauty 7.3% -4.3%
Sports & Outdoor 24.2% 10.2%
Other Specialist Retailers 12.9% 5.2%
Hospitality & Leisure -37.8% -20.1%
Eating & Drinking -1.9% -10.1%
Restaurants -32.7% -42.1%
Bars, Pubs & Clubs -13.5% -16.8%
Takeaways and Fast Food 18.3% -1.2%
Other Food & Drink 0.3% -8.6%
Entertainment -46.5% -37.0%
Hotels, Resorts & Accomodation -36.9% -36.0%
Travel -68.0% -38.0%
Travel Agents -78.2% -63.9%
Airlines -75.3% -70.0%
Other Travel -53.6% -35.8%
Other -2.7% 5.9%
Digital Content & Subscription 32.3% 27.0%
Fuel -15.7% -6.5%
Motoring 2.9% -7.8%
Other Services -5.1% 4.6%
     
Online 10.5% 29.0%
F2F -7.6% -10.9%

Notes to editors

In the coming months, the Consumer Spending release will be based on a slightly adjusted dataset, following the launch of UK Spend Trends 2.0. The new offering builds on Barclaycard’s strong history of publishing insights about UK consumer spending, and provides an in-depth view into consumer spending across more than 250 industries, customer age demographics as well as online and in-store purchases.

*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 26th September 2020 to 23rd October 2020. It is compared with 28th September 2019 to 25th September 2019.

The consumer confidence survey in this press release was carried out between 23rd October and 26th October 2020 by Longitude Research on behalf of Barclaycard. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

NB: all data in the release was prior to the government’s latest announcement of a lockdown in England, announced in November.

For more information, please contact please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0)7882 088 493 or Rebecca Butler at rebecca.butler@barclaycard.co.uk or +44 (0)7881 318767

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.