Lockdown triggers £12.9bn shift in consumer spending habits
The change is largely down to spending on four main “isolation economy” categories: groceries, alcohol, entertainment and hobbies and crafts, according to a report by Legal & General and economics consultancy Cebr.
However, the £12.9bn shift comes as average overall consumer spending has decreased by 31% per person due to Covid-19, equating to an annual fall of £215bn, the report said.
Many people are making spending cutbacks, even if they haven’t seen a change in their employment status.
But those still in work are now spending an average of £107 a week on groceries, alcohol, entertainment and hobbies – a 10% rise on pre-lockdown levels.
The average UK adult now spends £73.69 a week on grocery shopping, compared to £67.51 before the outbreak of the pandemic.
By contrast, spending on takeaways and fitness-related activities has declined most.
The research revealed that local economies and businesses could stand to benefit as a result of changes in consumer behaviour with 60% of people saying they plan to buy more products in local stores when the crisis is over.
Nigel Wilson, chief executive of Legal & General, said: “The Isolation Economy is a new feature of our daily lives and now encompasses some £13bn a year of the consumer economy.
“As the hub of the Isolation Economy, the home is becoming a more flexible space, doubling-up as a place for schooling, work, fitness and entertaining – and we can expect changes to the way we think about and design homes for future homeowners.”
Despite paying less for fitness-related activities, the report found across the UK there has been an increase in time spent on exercise and wellness, with adults dedicating an extra 20 minutes each week on average to these pursuits compared to pre-crisis levels.
Streaming entertainment has increased dramatically, with adults now spending on average 2 hours 22 minutes more each week watching TV, streaming programmes and gaming.
Socialising via digital platforms like Zoom came in a close second, with an increase of 2 hours per week per person.