Lockdown Legacies And Leave Behinds: The Lasting Impact Of The Pandemic On Consumer Behaviour

• Side-hustles remain lucrative, becoming the main source of income for one in three who has launched a new business or money-making opportunity since March 2020
• Online grocery ordering is now preferred by millions of Brits who have made the permanent switch away from visiting the supermarket for their weekly food shop
• Takeaway spending grew during the pandemic but half of Brits say they are cutting back
• Shopping behaviours have evolved, with Brits reducing spending at local independent shops, ordering fewer deliveries and using Click & Collect less often
• The analysis from Barclays combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Three years on from the start of the UK’s first lockdown, on 23rd March, new insight from Barclays reveals which consumer trends adopted during the pandemic have stood the test of time and which have been left behind, as the increasing cost-of-living also continues to impact discretionary spending.

Barclays’ top three ‘lockdown legacies’:

1. Covid careers

The pandemic powered a boom in UK entrepreneurship and inspired many Brits to start new side-hustles and small businesses – especially furloughed employees who found themselves with extra time on their hands. Barclays’ data shows that almost one in three Brits (28 per cent) has started a new small business or found a way to supplement their income since the first national lockdown three years ago.

The majority who started a new venture (86 per cent) are still running their small businesses or side-hustle, with over a third (34 per cent) saying it has become their main source of income. Popular start-ups and money-making initiatives started by these commercially-minded Brits include cleaning businesses, online tutoring, translation services, baking, cat-sitting, jewellery making and online fitness classes.

2. In-trend insperiences

During the pandemic, long supermarket queues and a shortage of grocery delivery slots led to a surge in demand for meal-box subscription services, and three years on many Brits have become even more reliant on their ease and convenience. Almost half (46 per cent) of those who signed-up to pre-prepared meal-kits and 35 per cent who started using make-your-own meal-kit subscriptions in the lockdowns now spend more on these services each month than they did during that period.

Lockdowns also led to a rise in demand for digital entertainment, services and experiences. As Brits spent more time at home watching boxsets, digital content saw rapid growth at the start of the pandemic – by April 2020, spending was up 40.5 per cent compared to February 2020, the last full month before the first lockdown. Even as restrictions eased after March 2021, digital content and subscription growth has averaged 41 per cent throughout the post-lockdown period versus February 2020.

3. Pandemic pastimes

Six in 10 (62 per cent) Brits seized the opportunity to learn a new hobby or skill when many leisure and entertainment ventures were closed, and millions have kept up their pandemic pastimes. Gardening (20 per cent), exercising (19 per cent) and baking (16 per cent) are reported as the most popular pursuits Brits have continued to enjoy since life returned to normal.

In particular, online training has continued to prove a popular way to stay in shape, with some fitness fans now using free online exercise videos to save money (13 per cent) instead of paying for classes. A similar number also say they now prefer to exercise at home or outdoors rather than visiting a gym (12 per cent) after adopting a new routine during the pandemic.

Barclays’ top 3 ‘lockdown leave behinds’:

1. Price overshadows support for shopping locally

Brits shopped closer to home and became more community-spirited during the height of pandemic, leading to significant growth at local food and drink specialist stores – such as butchers, bakeries and independent and convenience shops. Across the whole of 2020, spend in this category was up 28.6 per cent compared to 2019*.

However, now that almost seven in 10 (68 per cent) shoppers say they are looking for ways to reduce the cost of their weekly shop amid the cost-of-living crunch, Brits are increasingly prioritising lower prices over their desire to shop locally. Three in 10 (30 per cent) of these shoppers are buying from larger supermarkets because prices tend to be lower than in smaller, independent shops, and nearly a quarter (23 per cent) has shifted their spending because larger stores tend to have more options when it comes to budget and value ranges.

Despite these inflationary pressures, however, millions of Brits have remained loyal to local businesses. A quarter (25 per cent) say lockdowns made them realise how much they value their local high-street, so still try to support it where possible and 23 per cent now try to spend locally rather than shopping online.

2. Avoiding takeaway temptation

Over half (52 per cent) of consumers who ordered takeaways during the lockdowns say they now spend less on takeout food than they did during that period, with 25 per cent reporting they now spend significantly less.

Meanwhile, the proportion of grocery spending online compared to in-store has risen compared to pre-lockdown levels. Before the UK’s first lockdown in March 2020, only 10.0 per cent of grocery shopping was conducted online – this rose to 16.0 per cent during the lockdowns and until the restrictions were eased in March 2021, and has now settled at 13.4 per cent (February 2023 data). This indicates that – of the millions of Brits who switched to buying groceries online during the lockdowns – many more have made the change permanently, compared to those who have now returned to their preferred way to buy their weekly shop.

3. Dwindling deliveries

The number of home deliveries has fallen by an estimated 22 per cent compared to during the pandemic – Brits report that they received an average of 5.0 deliveries per month during this period, compared to only 3.9 per month now. In addition, 22 per cent of shoppers say they currently receive no online deliveries at all, compared to only 16 per cent during the pandemic.

Another ecommerce trend that has fallen in popularity since lockdown restrictions lifted is Click & Collect. Of the 53 per cent of Brits who have used Click & Collect, one in three (31 per cent) now use it less regularly than they did during the lockdowns, compared to just one in five (19 per cent) who has increased the number of orders they choose to pick up in-store.

Marc Pettican, Head of Barclaycard Payments, said: “From ‘insperiences’ to online fitness, the pandemic shaped and accelerated several notable shifts in consumer behaviour”
“However, the cost-of-living crunch is slowly unpicking some of these trends as Brits have had to become more selective about how and where they shop. For example, the boom in takeaways has tapered off, as has spending at local independent stores, as consumers continue to look for ways to cut costs to help make ends meet.
“What is positive though is that the entrepreneurial spirit we saw during the pandemic still lives on, with over a third of those who started a small business or side-hustle in the past three years even managing to turn it into their main source of income.”

– Ends –

Notes to editors

Barclays issues regular data and commentary on consumer spending trends. Across its issuing and acquiring businesses, Barclays sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. This press release is based on consumer card spending data from Barclays’ issuing business – i.e. Barclays debit card and Barclaycard credit card transactions. The spend data is split into the periods defined below and indexed against a baseline of February 2020 to determine how categories are performing versus pre-pandemic unless otherwise specified. The data is based upon calendar month periods rather than the reporting dates used in the regular monthly consumer spending report.

• Post-Lockdown: April 2021 to February 2023
• Lockdown Period: April 2020 to March 2021
• Pre-Lockdown Baseline: February 2020

The consumer confidence survey in this press release was carried out between 17th and 21st February 2023 by Opinium Research on behalf of Barclays. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

*Data relates to the period 23rd December 2019 to 20th November 2020. It is compared with 23rd December 2018 to 22nd November 2019.

For more information, please contact Alejandra Quintela at alejandra.quintelasanchez2@barclays.com or Oliver Palca at oliver.palca@barclaycard.co.uk

About Barclays

Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group. For further information about Barclays, please visit our website home.barclays.

About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. For further information, please email contact-MCI@barclays.com.

Source – Barclays