Spending on “Isolation Economy” categories of groceries, alcohol, entertainment and hobbies & crafts running at £247 million per week during lockdown, equivalent to an annual £12.9bn increase. However, average overall consumer spending has decreased by 31% per person, equating to an annual fall of £215bn. Local economies could be relative long-term gainers as a result of shifting consumer behaviours post lockdown.
A new report from FTSE100 financial services group Legal & General and Cebr, the economics consultancy, has revealed that the UK’s Isolation Economy has driven a shift in consumer spending habits equivalent to an annual £12.9bn. This change is largely a result of UK adults’ increased expenditure on four key “at home” categories1: groceries, alcohol, entertainment and hobbies & crafts, during the national lockdown. This shift, however, comes as consumers are spending an average of £17.9 bn less per month in the wider economy as a direct result of COVID-19.
Following the announcement of a UK-wide lockdown on 23rd March, UK adults are now spending an average of £104 per week on the top four Isolation Economy categories alone – a 5% increase on pre-crisis spending. This equates to a weekly rise in spending of £247 million. Those aged 35-54 are the biggest contributors in terms of spend, averaging £170 m per week on these four key sectors.
Overall, however, despite this £12.9bn shift in where money is being spent, UK households are spending an average of 31% less, equating to a fall in expenditure of £4.1 bn per week – or £215 bn per year.
The complete press release can be found here and the full report here.