Consumers shift spending habits to local stores during pandemic
Consumer spending declined 7.1% in 2020 due to the restrictions caused by the pandemic with buyers turning to local stores for their purchases.
According to the latest survey by Barclaycard, 2020 was a turbulent year for retail and hospitality but lifestyle changes boosted growth for some sectors such as online grocery.
Consumers continue to support their local high street and spend their money at food & drink specialist stores such as butchers and bakers. Small retailers have seen an uplift of 28.6% year-on-year as a result.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items rose by 4.1% year-on-year in 2020. Spending on non-essential items fell by 11.3%.
This was largely driven by supermarket shopping, which saw an overall growth of 15.7%, with online grocery shopping surging 70.3% as demand for delivery services increased.
These trends, along with lower prices at the petrol pump, also contributed to a decline in spend on fuel, which dropped by 20.3%.
Spending in department stores fell by 17.2% and that on clothing by 15.6% year-on-year.
On the other hand, non-essential items such as digital entertainment, services and experiences saw a rise in demand. Spending on digital subscriptions and electronics saw increases of 31.5% and 10.8%, respectively.
Raheel Ahmed, Head of Consumer Products at Barclaycard, said: “Hopefully with a vaccine being rolled out in 2021 we will see green shoots for the most severely impacted sectors. Having said that, some of the trends and changes we’ve seen in customer habits may be here to stay.”
Clare Bailey, Independent Retail Expert and founder of The Retail Champion, said: “Speaking to retailers, I am encouraged that many are continuing to shop where they live and support local businesses. Whilst those retailers who depended on commuters have been seriously impacted by the reduction in footfall this year, it’s encouraging to see that some of this spend has been transferred to local companies.”
“In addition, in such challenging times, many businesses have also been agile enough to adapt their local offering of products and services to support changing consumer demands. Despite the adversity this year has thrown into the mix, the positive connection which has grown between consumers and their local butchers, bakers or greengrocers is truly heartwarming and a trend I hope continues to thrive in 2021.”