Consumer spending declined 2.3 per cent in December as tighter restrictions hampered the high-street and hospitality, yet online retail saw strong growth
- Spending on essential items grew 4.5 per cent year-on-year, with festive food shopping fuelling an 88.0 per cent rise in online grocery spend
- Online retail increased by 52.2 per cent as Brits shopped from home, whilst tighter restrictions led to in-store retail declining 8.3 per cent
- Hospitality was hit hard, as festive social plans were cancelled, yet airlines and travel agents saw slight improvements due to vaccine optimism
- The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending
Consumer spending declined 2.3 per cent year-on-year in December – the largest decline since June 2020 – as the tightening of tiered restrictions across the UK hampered high-street retailers and hospitality.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 4.5 per cent year-on-year as Brits stocked up for the festivities, aided by a 14.7 per cent rise in supermarket shopping overall and online grocery spend surging 88.0 per cent. Meanwhile spend on fuel declined 20.7 per cent as tighter restrictions saw many Brits cancel plans to visit loved ones over the Christmas period.
Spending on non-essential items dropped 4.9 per cent – the largest decline since June 2020 (-22.3 per cent) as the growing spread of coronavirus led to more Brits staying at home and unable to visit physical retail stores.
While in-store retail spending fell 8.3 per cent, the significant shift to online shopping continued, with online retail rising by 52.2 per cent and accounting for almost half (46.8 per cent) of all retail spending in December.
Specialist retailers (which includes toy shops, jewellers and gift shops) and clothing both enjoyed significant growth online, rising 61.9 per cent and 34.0 per cent respectively, as shoppers turned to online stores for last minute presents and pre-Christmas sales.
Brits also continued to make the most of nights in by purchasing new boxsets, downloading new video games and ordering takeaways, with eating and drinking (81.0 per cent) and digital content and subscriptions (41.4 per cent) seeing strong online increases.
Shops in the local community continued to enjoy a boost as well, with specialist food and drink retailers such as butchers, bakeries and off licenses recording a 43.7 per cent rise. This comes as more than half (54 per cent) of Brits say they will do what they can to support local shops during 2021.
However, brick-and mortar retailers continued to be impacted by the restrictions, with department stores and clothing seeing declines of 15.2 per cent and 7.3 per cent respectively. The hospitality sector was also hit hard in December, with steep declines at bars and pubs (-71.4 per cent) and restaurants (-65.4 per cent) as new measures saw many Brits cancel festive social plans.
While overall travel contracted by 63.8 per cent, there was an improvement seen in spending across some categories in the sector. Airlines saw a less steep decline of 58.1 per cent compared to the previous month’s decline of 73.6 per cent. Additionally, travel agents recorded a smaller drop this month of 72.3 per cent. This comes as one in five Brits (22 per cent) say they are already making plans for a big holiday at some point in 2021, reflecting optimism that a potential recovery may come later this year.
The continued restrictions across the UK mean that Brits’ confidence in the UK economy remains low at 22 per cent – almost 20 per cent lower than at the same time last year.
However, consumer confidence in household finances has held up at 68 per cent, with almost a quarter (24 per cent) of the nation feeling more confident about spending on non-essential items than they have been for a long time. Of those who are feeling more optimistic, 40 per cent say it is because they have saved more than normal recently.
Raheel Ahmed, Head of Consumer Products, said: “Changing restrictions continue to have an impact on our spending habits – which was particularly acute across the high-street and hospitality sectors in December, with restaurants, pubs and bars hardest hit during a low-key festive season in the majority of the UK. As a result of further restrictions, online grocery spend surged and fuel declined as the majority cancelled their plans and stayed home for the holidays.
“Additionally, many still continued to support their local shops where possible, spending more time in their local community. Small businesses have continued to remain agile to these changing consumer habits – with many going online for the first time. From dog walking services to subscriptions of weekly meal kits, small businesses are exploring new ways to reach their customer base.
“With the latest government guidance to stay at home and a vaccine roll-out on the horizon, we are all hopeful of a brighter and more prosperous year ahead. Yet for now, the reality of lockdown life remains and it’s once more a hugely challenging time for high-street retailers as well as the hospitality, leisure and travel industries.”
– Ends –
| Spend Growth | Transaction Growth | |
| Essential | 4.5% | -7.6% |
| Non Essential | -4.9% | -7.1% |
| OVERALL | -2.3% | -7.3% |
| Retail | 12.7% | 3.4% |
| Clothing | -7.3% | -16.4% |
| Grocery | 17.3% | 1.6% |
| Supermarkets | 14.7% | -1.8% |
| Food & Drink Specialist | 43.7% | 26.2% |
| Household | 18.2% | 9.4% |
| Home Improvements & DIY | 20.0% | 17.5% |
| Electronics | 19.9% | 8.0% |
| Furniture Stores | 11.6% | -7.2% |
| General Retailers | 19.3% | 20.2% |
| General Retailers & Catalogues | 35.7% | 41.1% |
| Department Stores | -15.2% | -24.1% |
| Discount Stores | 21.5% | 7.7% |
| Specialist Retailers | 2.2% | -9.0% |
| Pharmacy, Health & Beauty | -3.3% | -14.8% |
| Sports & Outdoor | 13.2% | -0.3% |
| Other Specialist Retailers | 2.5% | -5.6% |
| Hospitality & Leisure | -50.0% | -40.2% |
| Eating & Drinking | -32.8% | -33.6% |
| Restaurants | -65.4% | -66.2% |
| Bars, Pubs & Clubs | -71.4% | -80.6% |
| Takeaways and Fast Food | 25.4% | 0.2% |
| Other Food & Drink | -39.4% | -33.1% |
| Entertainment | -62.4% | -63.4% |
| Hotels, Resorts & Accomodation | -58.2% | -71.8% |
| Travel | -63.8% | -47.9% |
| Travel Agents | -72.3% | -65.7% |
| Airlines | -58.1% | -65.5% |
| Other Travel | -59.4% | -47.0% |
| Other | -3.4% | 5.6% |
| Digital Content & Subscription | 40.9% | 32.9% |
| Fuel | -20.7% | -11.5% |
| Motoring | -12.8% | -21.4% |
| Other Services | 2.8% | 9.9% |
| Online | 22.6% | 31.3% |
| F2F | -18.3% | -20.6% |
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 21st November 2020 to 24th December 2020. It is compared with 21st November 2019 to 24th December 2019.
The consumer confidence survey in this press release was carried out between 22 December and 29 December 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.
For more information, please contact please contact Oliver Stevenson at oliver.stevenson@barclaycard.co.uk or on +44 (0)7880 184 177 or Rebecca Butler at rebecca.butler@barclaycard.co.uk or +44 (0)7881 318 767.
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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