Total UK consumer spending is expected to fall by 15% a staggering £183.6 billion this year due to Covid-19 lockdowns. Equating to a drop in spending of circa £6,600 per household.
The biggest decreases are in the foodservice, transport, and holiday industries.
Consumer spending in these three categories are predicted to fall by £140 billion in total, just over £5,000 per household – representing around 77% of the overall decline in consumer spending this year.
Top 3 categories where consumer spending is expected to fall in 2020
|Category||Total fall in consumer spending|
|Total fall in consumer spending per household|
|% change 2019 versus 2020|
But it seems there is light at the end of the tunnel for these three categories as they are expected to bounce back the strongest in 2021: spending on transport will increase by £32.3 billion compared to 2020, foodservice will rise by £17.7 billion, and holidays by £19.2 billion.
Three sectors are forecasted to experience the biggest increase in consumer spending this year – totalling £11.2 billion, or just over £400 per household – food, alcoholic, and non-alcoholic drinks purchased at ‘retail channels’ including supermarkets, and consumed at home.
Top 3 categories where consumer spending is expected to increase in 2020
(retail market sales)
|Total increase in consumer spending|
|Total increase in consumer spending per household|
|% change 2019 versus 2020|
|Alcoholic drinks||3.6 billion||129||+16.3%|
|Non-alcoholic drinks||0.7 billion||24||+5.7%|
Jack Duckett, Mintel Associate Director of Consumer Lifestyles Research, said: “The Covid-19 lockdowns have had a profound impact on consumer spending, decimating the transport industry, and broader travel and leisure sectors.
“But some sectors have benefited from the lockdown, with retail sales of food and drink boosted as all eating and drinking occasions moved into the home.
“Although consumer spending will recover from this year’s astonishing £180 billion drop, it will undoubtedly be a long path to recovery: Mintel forecasts suggest that pre-COVID levels will not return until 2023 at the earliest.”
Jack Duckett, Mintel Associate Director of Consumer Lifestyles Research, said: “We estimate that retail value sales of alcoholic drinks will grow 16% year-on-year – the fastest growth rate experienced for at least a decade – to reach £25.5 billion in 2020, as people trade nights out for evenings in.
“In particular, the current recession opens up opportunities for premium own-label drinks to grow in popularity. Learning from previous recessions, consumers know that one way of cutting back is to buy private label. In fact, 18% of premium alcoholic drink buyers would buy premium own-label drinks if their financial position worsened.
“The growth in the size of the older population over the next five years, and the fact that they are most likely to be insulated from the financial impact of the pandemic, makes targeting the ‘grey pound’ particularly timely for all brands including alcoholic drinks. A long heritage (40%), being aged for longer (40%), not being mass-produced (34%), and extra care in production (27%) are all factors that feed into over-55s’ perception of what makes an alcoholic drink premium.”
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Hospitality & Catering News: Consumer foodservice spending 2020 – 19 November 2020 – Consumer foodservice spending 2020.
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