The data offers sparkling clarity on just how damaging the pandemic and ensuing lockdowns have been to the UK economy. In March, at its lowest ebb, consumer spending dropped by a staggering 50% as the first national lockdown came into force.
Recovery was, expectedly, slow. The national lockdown didn’t end until July 4 (although there was some easing beforehand). It looks like this caused a fall in consumer spending, but it could actually mark the return of usual spending patterns where levels jump after end-of-month paydays and fall as the month goes on.
Spending nearly returned to February levels in September, possibly pushed up by school supplies purchases. It wasn’t until early November that it exceeded February numbers, just ahead of another national lockdown when people bought up everything they needed to get through it.
With the second lockdown causing a far smaller drop in spending, it also saw a far sharper recovery come December when the lockdown ended. It should be noted that Christmas-related shopping will have buoyed this heavily.
And that brings us to January 2021, with a third national lockdown and a drop nearly as sheer as that seen in March 2020 (although seasonal post-Christmas belt tightening will have had an effect too). With no set end date to the UK’s current lockdown, and coming up to a year since the first one, consumer spending sits 35% below pre-pandemic levels.
It’s grave news for businesses across the board and, while there has been government support in various forms, many will be wondering how much longer they can last as 2021 wears on (if they have even managed to last this long).
Different sectors, different strokes
Usefully, the data can also be split out into the following categories:
- Staples (food and drink, communication, utilities)
- Delayable (clothing and footwear, vehicle purchases, household goods)
- Work-related (public transport and fuel)
- Social (air travel, games of chance, restaurants, bars, and hotels)
Here are some specifics from the ONS on what exactly falls into each category (the percentages refer to their portion of overall spending).