Consumers spilled over into online shopping, takeout, home improvements and streaming subscriptions in 2021 as ongoing Covid restrictions limited where people could spend their money.
Households were more willing to spend their money in 2021, and spending during the year was almost 6% higher than in 2019, according to a review of transactions by Barclaycard.
While non-essential businesses remained closed at the start of the year, consumers were instead spending their money online. Online retail spending jumped nearly 88% in March 2021, compared to 2019, when it accounted for more than half (52%) of all retail spending.
Spending on essentials rose 11% year-on-year, largely driven by shopping in supermarkets, which rose more than 17% as restaurants, cafes, pubs and other hospitality venues remained closed for several months of the year. Spending on takeout and fast food soared 62%.
Consumers also spent significantly more on home entertainment, including digital content and subscriptions, which grew 47%, and electronics, which saw spending increase 10%.
Online grocery shopping, a trend that is expected to continue beyond the pandemic, jumped more than 97% during the year. The biggest jump of the year in online grocery spending came in March, when it soared nearly 120% as many consumers relied on deliveries from food retailers.
As many confined households turned to home improvement in 2021, some also added an extra member in the form of a pet, increasing spending at vets and pet retailers , which were almost a third (29%) higher than in 2019.
When Covid restrictions were eased in the spring, many locked-down consumers opted to go on holiday, although many remained in the UK, amid continued restrictions on international travel. Barclaycard, which reports seeing around half of the country’s debit and credit card transactions, said spending on hotels, resorts and accommodation rose for the first time since the pandemic began in June 2021, reaching a peak of nearly 16% increase in spending. in August.
The outlook for consumer spending over the coming year remains uncertain amid rising Covid cases, according to Jose Carvalho, head of consumer products at Barclaycard.
“As we look to 2022, the economy will face new challenges related to rising household bills, inflation and uncertainty regarding the new variant of Covid,” Carvalho said. “Yet, as we have seen over the past two years, consumers and businesses are able to adapt and overcome immense challenges and adversities.”
As the UK enters the third year of the pandemic, holiday spending is set to be a top priority for 2022, according to new research from online bank Marcus of Goldman Sachs. It revealed that more than a third (34%) of consumers plan to spend more on travel in the coming year, up from 22% in 2021, while 30% of respondents said they expected to spend less on takeout.