Britain’s consumer spending fell by 16.3 per cent in January compared to the previous year, while online growth surged for many categories, according to research by Barclaycard.

Barclaycard data, which sees almost half of the UK’s credit and debit card transactions, found that the fall in spending represents the sharpest decline since May 2020, when the first national lockdown measures were in place.

However, the research also showed that spending on essential items in January actually grew by 3.9 per cent year-on-year, with higher demand for home deliveries pushing an increase of nearly 127 per cent in online supermarket spend.

Non-essential shopping declined by 24 per cent, attributed to the closure of retail stores under lockdown rules.

The most significant drops were seen at department stores (-36.8 per cent), pharmacy, health and beauty (-27.2 per cent) and clothing (-25.0 per cent).

The report also revealed that online retail spending grew by 73.2 per cent compared to the previous year, accounting for 54.9 per cent of all retail spend in January.

Specialist retailers, including stationery shops and sports & outdoor retailers, recorded particularly strong growth online (87.7 per cent.)

“As the impact of the latest lockdown start to takes its toll, we’ve seen particular sectors struggle, as physical premises across the UK were forced to close. Last month’s glimmer of hope for the travel sector also seems to have stalled as tougher border controls saw bookings drop,” said Raheel Ahmed, head of consumer products, Barclaycard. “Yet, on a more positive note, we have seen a surge in many online categories as the demand for home deliveries continues to rise. From meal kits and subscription services, to online grocery shopping, Brits have continued habits they formed in the first lockdown, with a record high seen in spending on takeaways and fast food.

He added: “While confidence in job security has reached its lowest point in over a year, the ongoing vaccine rollout means that Brits believe there is hope on the horizon, and we all look forward to being reunited with much-missed family and friends later in the year.”

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