Consumer spending falls by 31% wiping £215bn off the economy – but alcohol and food sales surge as average grocery bills rise to an average of £107 a week in ‘isolation economy’
- Adults are spending more on alcohol, entertainment, groceries and hobbies
- Lockdown triggered a shift in spending habits equating to £12.9 billion annually
- Data is from Legal & General and Centre for Economics and Business Research
Consumer spending has dropped by 31% per person and wiped £215 billion from the economy in lockdown Britain – but adults are spending more on alcohol, entertainment, groceries and hobbies amid the new ‘isolation economy’, research indicates.
People remaining at home amid a nationwide lockdown has triggered a shift in consumer spending habits equating to £12.9 billion annually, according to analysis from Legal & General and the Centre for Economics and Business Research.
Despite the £12.9 billion shift in spending, British households have been saving money generally, with overall consumer spending falling by 31% per person – a ‘severe blow’ equating to a fall in expenditure of £215 billion per year, the research found.
Those who are still in employment were found to be spending an average of £107 a week on groceries, alcohol, entertainment and hobbies – a 10% increase compared with pre-lockdown levels.
On average, adults spend £73.69 per week on grocery shopping.
Those who are still in employment were found to be spending an average of £107 a week on groceries, alcohol, entertainment and hobbies – a 10% increase compared with pre-lockdown levels (stock image)
Overall, across the UK this represents a 9% rise among all adults, and a 14% increase for those who have had no changes to their salary or employment status as a result of Covid-19, the report found.
This increase in spending has also largely been driven by those aged between 35 to 54, who are spending £89.94 per week on groceries. Under-35s spend £56.90 on average while over-55s spend £70.94 per week typically, the research found.
Nigel Wilson, chief executive at Legal & General, said: ‘The isolation economy is a new feature of our daily lives and now encompasses some £13 billion 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 home owners.’
The research also suggests adults are dedicating 20 minutes more each week to fitness typically compared with before the crisis
The report states: ‘Although the Isolation Economy sectors have prospered, there’s a very real concern about wider consumer spending.
‘As a nation, it has fallen by almost a third (31 per cent) due to Covid-19. Our survey suggests this is equivalent to a £4.1bn drop in weekly spending or £215bn annually – a severe blow for the nation’s businesses.’
The research also suggests adults are dedicating 20 minutes more each week to fitness typically compared with before the crisis and two hours 22 minutes more each week watching TV, streaming programmes and gaming.
The report also found that more than two-thirds (69%) of people plan to continue cooking more meals at home longer term.
Nearly a fifth (19%) of those who have used their time in lockdown to take up a language or educational class intend to keep this up longer term.
Shops in local communities may also benefit from people’s changed habits, with 60% of people planning to buy more products in local stores to help the local economy in the longer term.
More than half (58%) of people said they would be willing to pay more for products that have been made in Britain, rather than imported from overseas.