Saving & Banking

Brits spent closer to home and online during lockdown

People spent money an average of 1km closer to home than usual during the pandemic, while more than half of spending was online.

Debit card data from Lloyds Bank found that as the UK approaches one year living with Covid-19 restrictions, 55% of customers’ money was spent online by the end of February 2021, compared with 38% in February 2020.

For those who continue to spend away from their homes, the median distance travelled has reduced by 1.2km over the course of the pandemic, from 3.9km to 2.7km.

When using debit cards, roughly 79% of all transactions are now by contactless payment, up from 68% in February 2020 before the first lockdown.

Similarly, the amount withdrawn from ATMs on debit cards has also fallen dramatically since lockdown, down a third (33%) compared to the year before.

Surge in supermarket spend

As we’ve spent more time in our homes, supermarket spending on essentials has soared above pre-pandemic levels, up 22%.

However, despite a huge shift to supermarket delivery services just 5% of transactions were online, only a slight increase on the year before (4%).

Panic buying in the first lockdown caused supermarket spending to jump 47% in the week ending 22 March 2020. Supermarket spending in this week was only 9% lower than the week leading up to Christmas.

Eat Out to Help Out was a boost for restaurants

Unable to visit restaurants for large periods over the past year, consumers have spent 26% less in restaurants during the pandemic compared to the year before.

However, restaurants moving to online orders meant that during the pandemic, 26% of all restaurant transactions have been online, compared to just 9% before.

The Eat Out to Help Out scheme provided a boost to restaurants, which had seen spending fall 76% in the first week of lockdown compared to the same week in 2019.

By the last week in August, restaurant spend was up a third on the same week in 2019, and it was also this week which saw the most amount spent at restaurants in 2020.

Workers cut commuting costs

Unsurprisingly, with most workers working from home for some or all of the past year, spending on commuting has fallen.

By the week ending 12 April 2020, spending on the commute was 89% down on the same week in 2019.

Overall, commute spending is almost two thirds down (59%) compared to the year before the pandemic.

Gabby Collins, head of payments at Lloyds Bank, said: “The pandemic has fundamentally changed where and how we have spent our money over the last 12 months.

“One of the most visible effects of non-essential shops, pubs and restaurants being closed is the huge shift to online. Businesses have adapted to meet consumer demand, meaning over half of all spending is now online, up from just 38% in the months before. When we have shopped in store, it’s been 1km closer to home in a boost to local high streets.

“Looking ahead, as the vaccine continues to be rolled out across the UK, those businesses who have welcomed few, if any, visitors will be willing a smooth opening by June. We know that demand is there; spending on holidays alone spiked 109% on the announcement of the government’s roadmap out of lockdown.

“We’ll have to see whether online spending behaviours set in once people are given the opportunity to visit their favourite places again. We think we could see a spending spree, when people are reunited with friends and family.”