Yahoo Finance Coronavirus: Brits shop closer to home due to lockdown while half of spending is online
The coronavirus pandemic has pushed more Brits to shop 1km closer to home, boosting the local economy, new data has shown, with over half of total spending being done online.
That is according to Lloyds Bank (LLOY.L), which looked at how people in the UK spent their money during the health crisis over the last 12 months.
Debit card data showed that 55% of customers’ money was spent online by the end of February 2021, compared to 38% at the end of the same month the year before.
The median distance travelled reduced by 1.2km over the course of the pandemic, from 3.9km to 2.7km.
ATM and branch withdrawals fell 33%, while almost eight in 10 (79%) in store debit card payments were contactless, as people avoided cash transactions to prevent the spread of COVID-19.
Contactless payments, which were raised from £30 ($42) to £45 from 1 April last year in response to the pandemic, was 68% in the February before the first lockdown.
Lloyds also found that panic buying caused supermarket spending to surge 47% in March last year, which is now up 22% against pre-pandemic levels. Despite a huge shift to supermarket delivery services just 5% of transactions were online, only a slight increase on 4% the year before.
Consumers spent 26% less in restaurants during the pandemic compared to the year before as lockdown restrictions forced them to close indoor dining. However, the adaptability of businesses to move to online orders meant that during the pandemic, 26% of all restaurant transactions have been online, compared to just 9% before.
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The chancellor’s Eat Out to Help Out scheme provided a boost to restaurants, which had seen spending fall 76% in the first week of lockdown compared to the same week in 2019.
By the last week in August, restaurant spend was up a third on the same week in 2019, and it was also this week which saw the most amount spent at restaurants in 2020.
“One of the most visible effects of non-essential shops, pubs and restaurants being closed is the huge shift to online,” said Gabby Collins, head of payments at Lloyds Bank.
“Looking ahead, as the vaccine continues to be rolled out across the UK, those businesses who have welcomed few, if any, visitors will be willing a smooth opening by June.”
She added: “We’ll have to see whether online spending behaviours set in once people are given the opportunity to visit their favourite places again. We think we could see a spending spree, when people are reunited with friends and family.”
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Some of the UK’s favourite cultural past times were also heavily restricted by the pandemic, Lloyds said, with gigs and theatre performances cancelled for live audiences from March 2020.
Since then, spending fell 38% compared with the same period before lockdown.
However, since Boris Johnson’s announcement outlining the UK roadmap out of lockdown in the coming months, spending on cultural activities rose 227% the week after the details were made public.
Similarly, spending on holidays enjoyed a very recent surge in spending across the same period, up 109%. However, spending on holidays over the last year remains 69% down compared to the amount spent before the pandemic.
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