Lockdown spending rises for ‘at home’ goods
A new report from Legal & General has revealed that the UK is now spending £247m a week on key ‘at home’ sectors such as groceries, alcohol, entertainment and crafts – a rise of 5% on pre-lockdown spending.
Following the announcement of a UK-wide lockdown on March 23, UK adults are now spending an average of £104 per week on the top four ‘at home’ categories alone. Those aged 35-54 are the biggest contributors in terms of spend, averaging £170m per week on these four key sectors.
Overall, however, despite this shift in where money is being spent, UK households are spending an average of 31% less on the wider economy, equating to a fall in expenditure of £4.1bn per week – or £215bn per year.
Many consumers are having to make cutbacks in certain areas, even if they haven’t seen a change in their employment status. The employed are now spending an average of £107 a week on groceries, alcohol, entertainment and hobbies – a 10% rise on pre-lockdown levels.
By contrast, spending on takeaways and fitness-related activities have declined most, with the share of people reporting a decrease in spending exceeding those reporting an increase by 27% and 14%, respectively. The share of people reporting a decrease in spending on tobacco, socialising and costs associated with education was 7% higher than those reporting an increase for each of those categories.
The research also revealed that local economies and businesses could stand to benefit as a result of these changes in consumer behaviour.
60% of respondents said that when the lockdown ends they plan to buy more products in local stores to help the local economy, with 82% confirming that the coronavirus crisis has highlighted to them just how important it is to have a stable supply of locally produced food and goods.
A further 58% of respondents said that they would be willing to pay more for products that have been made in Britain, rather than imported from abroad.
Nigel Wilson, CEO at Legal & General, said: ‘The COVID-19 crisis is creating fundamental changes to how we work, live and how we spend both our money and our time. Businesses should prepare for lasting change to the consumer economy and falling levels of demand that other areas of the economy will need to step up to fill.
‘Billions will need to be invested in new growth industries like health, well-being and life sciences to replace falling spend and fewer jobs in traditional face-to-face consumer industries like travel, physical retail and hospitality.’
Photo Credit – Pixabay
