Online Shopping, Pets and Takeout Fuel Spending Rise in UK in 2021 | Consumer spending
Consumers jumped into online shopping, take-out, home renovations and streaming subscriptions in 2021 as ongoing Covid restrictions limited where people could spend their money.
Households were more willing to spend their money in 2021, and spending during the year was almost 6% higher than in 2019, according to a review of transactions by Barclaycard.
While non-essential stores remained closed at the start of the year, consumers instead spent their money online. Online retail spending jumped almost 88% in March 2021, compared to 2019, when it accounted for more than half (52%) of all retail spending.
Spending on essentials rose 11% in the 12 months, largely driven by shopping in supermarkets, which rose more than 17% as restaurants, cafes, pubs and other hospitality areas remained closed for several months of the year. Spending on take out and fast food increased 62%.
Consumers also spent significantly more on home entertainment, including digital content and subscriptions, which rose 47%, and electronics, which saw spending increase by 10%.
Online grocery shopping, a trend expected to continue beyond the pandemic, has jumped more than 97% during the year. The biggest increase of the year in online grocery spending came in March, when it climbed nearly 120% as many consumers relied on deliveries from grocery retailers.
While many confined households have turned their attention to home improvement in 2021, some have also added an additional limb in the form of a pet, increasing spending at vets and animal retailers. costs, which were almost a third (29%) higher than in 2019.
When Covid restrictions were relaxed in the spring, many locked-in consumers opted to go on vacation, although many remained in the UK, amid continued restrictions on international travel. Barclaycard, which reports seeing about half of the nation’s debit and credit card transactions, said spending on hotels, resorts and accommodation rose for the first time since the pandemic began in June 2021, peaking at nearly 16% increase in spending in August.
The outlook for consumer spending over the coming year remains uncertain amid rising Covid cases, according to Jose Carvalho, head of consumer products at Barclaycard.
“As we look to 2022, the economy will face new challenges related to rising household bills, inflation and uncertainty over the new variant of Covid,” Carvalho said. “Yet, as we have seen over the past two years, consumers and businesses are able to adapt and overcome immense difficulties and adversities.”
As the UK enters the third year of the pandemic, holiday spending should be a top priority for 2022, according to new research from Goldman Sachs’ online banking Marcus. It found that more than a third (34%) of consumers planned to spend more on their travel in the coming year, up from 22% in 2021, while 30% of those polled said they expected to. spend less on take out.