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UK retail spending dives as lockdown drives more shopping online

LaToya Harding
·Contributor
·3-min read
People wearing face masks walk along the shopping district Oxford Street which is largely empty of shoppers as the national coronavirus lockdown three continues on 28th January 2021 in London, United Kingdom. Following the surge in cases over the Winter including a new UK variant of Covid-19, this nationwide lockdown advises all citizens to follow the message to stay at home, protect the NHS and save lives. (photo by Mike Kemp/In Pictures via Getty Images)
As bricks-and-mortar shops remained closed due to COVID-19 restrictions, less people were inclined to purchase non-essentials, which dropped 24.2%. Photo: Mike Kemp/In Pictures via Getty Images

Consumer spending declined 16.3% in January when compared to the previous year, the sharpest decline since May 2020 as national lockdown measures continue to drive the shift to online shopping.

Spending on essential items grew 3.9% year-on-year, according to the latest figures from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions.

As bricks-and-mortar shops remained closed due to COVID-19 restrictions, less people were inclined to purchase non-essentials, which dropped 24.2%.

The steepest declines on the UK high street were seen at department stores, which fell 36.8%, pharmacy, health and beauty (down 27.2%) and clothing (-25%), Barclaycard said. The company’s report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending.

Bars, pubs and restaurants also recorded significant declines, while tighter travel restrictions hit travel agents and airlines.

Fuel recorded its sharpest decline, down 32.3% since June 2020 as prices at the pump continue to fall and more Brits stay at home to curb the spread of a new more deadly variant of the virus.

READ MORE: 2020 UK retail sales worst on record

In contrast, ordering takeaways reached a record high during the period, up 32.6%, and online retail remained strong with a 73.2% rise, accounting for 54.9% of all retail spend last month.

High demand for home deliveries drove a 126.8% surge in online supermarket spend and purchases by over 65s grew much faster than other age groups, more than quadrupling (332.5%) compared to last year.

Spending at physical food and drink specialist stores – which includes butchers, bakeries, and greengrocers – also grew 40.5%, as Brits continued to support nearby independent businesses.

In the three months to the end of January, in-store sales of non-food items declined 36.5% in total and 19.8% on a like-for-like basis, the British Retail Consortium revealed.

This was worse than the 12-month total average decline of 28.3%. For January, the like-for-like excluding temporarily closed stores remained in decline.

During the period, food sales increased 7.5%, non-food retail sales increased by 5.6%

Helen Dickenson, chief executive of the British Retail Consortium, said: “The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending – especially on clothing and footwear.

“Meanwhile, retailers have worked incredibly hard to expand their online delivery and click and collect offerings to ensure everyone can get the products they need during lockdown. This has led to record growth for online non-food sales and is a testament to the resilience and innovation of retail, which in the face of the pandemic, has rapidly adapted and invested in online platforms and delivery logistics.”

However, she warned that the UK government must provide firms, which have been hardest hit, with necessary financial support to prevent further administrations and job losses. This included targeted business rates relief beyond March.

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