Consumer spending on non-essentials fell 22.1% in February

Overall consumer spending dropped 13.8% year-on-year in February, 2021, but spending on non-essentials was hardest hit at -22.1% as much of the high street remained closed due to Lockdown 3, according to the latest data from Barclaycard.

However, spending on essential items grew 5.3% year-on-year and supermarket expenditure was up 17.4% overall, with online grocery spend surging 115.2% as many Brits continued to rely on home deliveries for food shopping.

Online retailers continued to see strong growth, with online sales accounting for 53.7% of all retail spend in February. Spending at online general retailers, such as online marketplaces and catalogue shops, increased 100%, while online specialist retailers – including florists and jewellery stores – saw 95.9% growth, as Brits bought presents for Valentine’s Day and lockdown pick-me-ups.

Almost a quarter (23%) said they were more willing to spend on treats for themselves and family compared to January.

Confidence in household finances held up at 68%, with more than 42% of consumers saying they have saved more money than usual since the pandemic began. Many are already thinking about where to spend their savings, with 20% saying they will take a big holiday with the extra money they have saved, and 13% are planning to treat themselves to something.

Meanwhile, confidence in the wider UK economy in February rose 4% from January to its highest point in the past 12 months at 28%.

Raheel Ahmed, Head of Consumer Products at Barclaycard, said: “Despite a very challenging environment, it’s inspiring to see many retailers remaining resilient and doing what they can to maximise online sales while physical stores remain closed. In addition, as we all spend more time at home, we’ve seen home subscription services, fresh food boxes and meal-kit services become a popular mainstay of life in lockdown.

“The start of spring, the government’s roadmap out of lockdown, the vaccine roll-out and the extension to the stamp duty holiday are contributing to a lift in the nation’s spirits. With consumers generally feeling more optimistic, there is a strong indication of a more prosperous period to come as the long-awaited recovery and life after lockdown begins.”

Food and drink specialist stores, including butchers, greengrocers and fresh food box services, actually reached a record high of 63.3% in February.

Spending at discount stores was another bright spot, up 32.3%, as over half (56%) of Brits say they’ve become more careful to seek out value in the purchases they make.

Home improvement and DIY spend saw a 10.3% increase as nearly a third (32%) of consumers say they are looking forward to ‘spring cleaning’ and sprucing up their homes.

In another ongoing lockdown trend, spending on digital subscriptions and takeaways rose 42.6% and 30% respectively, as couples celebrated Valentine’s Day with date nights at home and 20% enjoyed a takeaway to mark the occasion.

However, spending on fuel fell 30.2% as travel restrictions and working from home kept commuters off the roads and, unsurprisingly, pubs and bars saw a 95.7% decline, while spending at restaurants dropped 84.6%.