Coronavirus: Grocery shopping and staycations boost UK spending

Consumer spending grew 0.2% in August, the first uplift since pre-coronavirus pandemic levels in February, as Brits enjoyed the last of summer.

Data compiled by Barclaycard showed spending on essential items grew 5.1% year-on-year, largely driven by supermarket shopping which was up 14.9%.

The number of transactions returned to similar levels seen last year, down just 2.4%, as Brits embarked on staycations and gradually started returning to workplaces.

Spend on non-essential items shrank by 1.6%, the smallest fall since lockdowns began.

Clothing also saw its first increase in spending since March 2019, rising by 0.3% as shoppers jumped on end-of-season sales.

Alongside this, spending at department stores improved, with the smallest drop (-3.6%) in the category since February 2020, according to the data.

Home improvements and DIY were on the up, as people continue to adjust to working from home.

Confidence in the pubs and restaurants sector returned as transactions grew by 9.3%. This was the first uplift since lockdowns began.

Takeaways and fast food also saw their highest increase (20.7%) since tracking began for this category in September 2019, while meal subscription services rose by 65.8% as fresh, hassle-free dinner options became a mainstay in many households.

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Despite an increase in spending in multiple sectors, confidence in the UK economy fell to 19%. This is its lowest level since the index began six years ago and has more than halved from levels of 42% seen in January and February this year.

Despite this, household confidence remained steady, at 68%, as holidaymakers postponed overseas travel.

45% said they have saved money because they were unable to go abroad this summer, with nearly a quarter (23%) putting the money into savings instead.

Raheel Ahmed, head of consumer products at BarclayCard, said: “It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throws of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began.

“Retailers may take reassurance from the fact that household confidence remains steady, and of course, the restaurant sector also benefitted from the boost provided by the Eat Out To Help Out Scheme. As this discount comes to an end, and the lure of pub gardens slip away with the sunshine, we will see the resilience of businesses truly tested as we head into autumn.”