At a time of uncertainty you would think people would spend less and save more. The reality on the ground couldn’t be further from the truth. As recent data shows, overall consumer spending in the UK was up during the early stages of the lockdown. Surprised? Hardly, since we were all in unfamiliar territory and people had to adapt quickly to the situation.
This article looks into the shift in spending habits during lockdown. From schools and shops closing to working from home and suddenly entertaining kids 24/7, the ways we spend money are also changing.
Essential vs Non-Essential Spending
Ever since lockdown and the saga concerning what’s essential or non-essential shopping, the nation’s supermarket bill has been skyrocketing. According to a Fablious survey, all top supermarkets, bar one, saw a 20% plus increase in transaction amounts. Although overall numbers of transactions were fewer during this period, people spent more on each visit to the supermarket. The biggest winner in the supermarket wars was Morrissons with a whooping 32% increase in transaction value.
Panic buying may have a role to play in the increase in average basket value as shoppers scrambled to get their hands on anything the could.
Takeaway Food Spending Reaches Record Highs
With a a ban on eating out in force most people turned to the next best thing, takeaway food. Coming up with creative meals to feed an entire family every single day is not easy. To survive restaurants had to overhaul their bussiness model, with most turning to offering take out meals to survive. Established takeaways saw an increase in order numbers and consequently revenue growth. However, the biggest winners in this story seem to be food delivery companies such as Just Eat and Deliveroo. Both companies saw a 40% and 60% increase in the number of transactions respectively.
Online Bingo, Casino and Gaming Websites
With all live sport coming to a sudden halt, the traditional gambling industry activity suffered immensely. With punters unable to visit gambling shops to place their bets, online gambling games such as slots, blackjack and roulette suddenly became more popular. The audience for online bingo is largely women and bingo sites like Mecca Bingo and Jackpot Joy enjoyed an upward tick in spending in the double and triple digits (47% and 351% respectively). Shares in online gambling company 888.com surged during this period, with daily revenues increasing by 34%.
According to a report by the Gambling Commission, betting on online slot machines increased by about 25% during lockdown. Another interesting statistic is that the number of sessions lasting more than an hour saw a 23% rise. The conclusion is that more people are gambling for longer during lockdown.
Lockdown Boosts Retail Finance and Buy Now Pay Later
Klarna is a Swedish Fintech success story revolutionising the consumer credit market. With operations in over 17 countries, the company saw a growth in demand for its products. According to Klarna, “During lockdown, DIY, home and garden purchases went up 196% as more and more people turned to garden to pass the time in quarantine.”
A market seeing growth in the UK market already, consumer credit or retail finance found a new footing during lockdown. Other market participants such as Clearpay and Laybuy experienced unprecedented growth during this period (22% and 185% respectively). The demand for consumer credit products is likely to increase as the UK’s economy is officially in a recession.
Showing You Care With Greeting Cards
Another segment seeing growth during the UK’s quarantine period is the greeting cards market. Traditional players like Card Factory reported a surge of 302% on it’s website as people sent dozens of cards to spread some love. With special occasions such as Easter, Fathers Day and Mother’s Day all coming along during lockdown, cards and photo presents really made a difference.
Moonpig app downloads tripled early on during the lockdown with transactions seeing a 156% rise. Online photo printing also saw a rise as families could not get together to celebrate special occassions such as birthdays, christenings, and weddings.
Gaming, Streaming and Entertainment Websites
With more people spending a lot of their time at home and children off school, keeping veryone entertained has not been easy for many families. It’s no wonder that subscriptions to online gaming platforms, streaming services and other entertainment websites have gone through the roof.
Nintendo, XBOX and Playstation all saw meteroric increases in the total expenditure on their sites (230%, 95% and 32% respectively). Netflix and Amazon share prices reached record highs as demand for streaming services grew. Amazon and their video service, Amazon Prime also saw a 67% growth with streaming services earning 4.6m new subscribers during lockdown.
What’s The Future Of Spending
As the COVID-19 pandemic continues and the UK furlough scheme comes to an end, growing numbers of people are facing uncertain futures. As the economy slowly opens up, people’s spending habits are likely to change too. However, spending in sectors such as gambling may continue to go up. Now that people can go out and shop, supermarket spending may well fall to pre-lockdown levels.