Consumer spending falls in February

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Consumer spending fell 13.8% year-on-year in February as lockdown restrictions continued, but some sectors saw record growth, new research reveals.

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Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 5.3%. Boosted by food and drink specialist stores – including butchers, greengrocers, fresh food box and meal-kit services – the category saw record growth of 63.3%, an increase of 7.5% on January’s figure.

Supermarket expenditure was up 17.4%, with online grocery spend surging 115.2%, as many Brits continued to rely on home deliveries. However, fuel spend fell by 30.2%, as travel restrictions and working from home continued.

The data shows shopping at discount stores increased by 32.3%, as more than half of Brits say they have become more careful to seek out value in the purchases they make.

In addition, the data finds that spending on takeaways rose by 30.0% as couples celebrated Valentine’s Day with date nights at home.

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

The research shows confidence in household finances held up at 68%, with 42% of consumers saying they have saved more money than usual since the pandemic began. Meanwhile, confidence in the wider UK economy rose 4.0% from January to its highest point in the past 12 months (28%).

Raheel Ahmed, head of consumer products, 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.”