UK households are expected to have spent £6,600 less this year after the pandemic slashed demand for holidays, eating out and transport, according to new research.
In total, consumer spending for 2020 is on course to be £183.6bn, or 14.9%, lower in 2020 compared to the previous year, according to consumer analysts Mintel.
Bucking the trend has been growing demand for food and drink bought for home consumption, including alcohol – up at the fastest rate for a decade – and tea, as people swap going out for staying in, the report said.
Demand for holidays has slumped
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.”
Mr Duckett said although consumer spending would recover it would take until at least 2023 to return to pre-COVID levels.
The bulk of the decline in spending is down to three main categories – transport, eating out and holidays – together accounting for a drop of £140.1bn.
Transport spending is expected to be £55.1bn lower – or £1,982 per household – with food service, or eating out, down £44.3bn (£1,593 per home) and holidays by £40.7bn (£1,462).
Higher spending for 2020 is led by products bought from retailers – food up £6.9bn (£249 per household), alcoholic drinks ahead by £3.6bn (£129) and non-alcoholic drinks up £700m (£24).
Spending on drinking at home has increased
Retail sales for alcohol are expected to have climbed by 16% – the fastest growth for at least a decade – and hot drinks (a category dominated by tea) by 7% after years of lacklustre demand.
The report comes a day after Naked Wines reported an 80% rise in revenues in the six months to the end of September while over the same period holiday company Jet2 flew just 990,000 passengers, down from more than 10 million a year earlier.