Consumer Spend Contracts But Netflix Et Al Get A Boost, Finds Barclaycard
The imposition of further virus restrictions and the arrival of colder weather have combined to send consumer spending down 0.1% year-on-year in October, with online shopping ruling the day according to Barclaycard.
It’s not all doom and gloom, however, with digital content and subscriptions jumping 32.3% as longer nights saw the nation turn to takeaways and box sets.
A representative sample of 2,000 UK consumers were polled by Longitude Research between 23 and 26 October for the survey, which found consumer confidence has hit its lowest ebb since the height of the first wave of the pandemic in May.
What are consumers spending on right now?
Consumers are turning away from non-essential spending with the category contracting 1.7%, reversing a 0.6% gain recorded the month before.
Clothing sales meanwhile dropped 2.7% as a whole, although online clothing sales continue to boom with 20.6% growth. Department store spend bore the brunt of this shift with a contraction of 9.9% – far worse than the 0.2% decline recorded in September.
Home deliveries have become the backbone for many as online supermarket spend surged 94.4% to account for 13.7% of all expenditure in the category, up from 13% the month prior.
These numbers may have been artificially inflated by hoarders, however, with 33% of Britons admitting that they have taken to stockpiling essential items in anticipation of future shortages.
The looming holiday season has lifted all boats, however, with early bird Christmas shoppers fueling 50% growth among general retailers and catalogues through October.
Local businesses have also weathered the storm better than most as shrinking travel patterns boost independent butchers and greengrocers, where spending jumped 50.7% on the back of 48% of shoppers consciously supporting the high street.
A boost for online services and digital content
A greater proportion of time spent indoors correlates to more hours spent on the internet, driving online transactions up 29% in October to account for 45.7% of all retail spend – up from 43.4% in the month prior.
Pounds and pence allotted to digital streamers such as Netflix and Amazon Prime surged 32.3%, the greatest uplift since the imposition of the first national lockdown, while takeaway spend jumped 18.3%.
But how confident do consumers feel?
Consumer confidence and, in turn, advertising expenditure has taken a knock with optimism in short supply, dropping to 67% in the survey period from 70% in September.
Despondency is linked to a lack of faith in the strength of the British economy, with just 22% confident of growth, slumping to 15% of over-55s. The most optimistic age group was those between 18 and 34, although even here just 34% felt confident.
Raheel Ahmed, head of consumer products at Barclaycard, commented: “As Brits once again adjust to tighter restrictions, it’s no surprise that the digital habits adopted earlier this year are enduring. As we enter another period of lockdown in England and further restrictions across the UK, this stay-at-and home mentality is likely to persist, as is the popularity of takeaways and digital subscriptions – helped along by the colder weather and darker evenings.”
Retailers are reining in expectations of a bumper Christmas as the mood music shifts in response to suggestions seasonal spend may fall £9bn short of last year, despite an uptick in e-commerce sales.