Britain’s independent shops buck Covid sales slump in 2020

Britain’s independent shops had a sales boost in 2020 despite an overall drop in retail spending, as Covid travel restrictions and working from home prompted consumers to shop on local high streets instead of city centres.

Data from Barclaycard shows spending at independent food and drink shops, including off-licences, butchers and bakeries, jumped 28.6% in 2020 compared with a year earlier.

In contrast, total consumer spending fell 7.1%, as social distancing rules left shoppers with fewer opportunities to spend on overseas holidays, hospitality and in city centres.

Barclaycard, which covers nearly half of the UK’s credit and debit card transactions, found that while spending on essential goods such as groceries rose by 4.1% compared with 2019, non-essential spending fell 11.3%.

Department stores were particularly hard hit, with spending down 17.2%, while clothing retailers experienced a 15.6% slump, leading to the financial problems at the likes of Debenhams and the Topshop owner, Arcadia. However, bricks and mortar discounters had a 25.4% increase, as Britons facing furlough and job cuts sought value for money deals.

Consumers forced to spend more time at home turned to DIY projects to spruce up their living space. Pent-up demand after the reopening of non-essential shops in June pushed overall spending at DIY and home goods stores up 9.8% for the year. Furniture retailers reported a 5.3% rise, as consumers invested in big ticket items.

Britons treated themselves – as well as friends and family they could not see – to flowers throughout the year, with spending at florists rising 22.7%. Crafts and hobby spending increased 9.8%, and pets were given extra attention with vet and pet retail increasing 10.7%.

But the report also shows how much restaurants suffered despite Rishi Sunak’s “eat out to help out” initiative over the summer. Restrictions throughout the rest of the year contributed to a 47% drop in restaurant spending, while bars and pubs took a 36.7% hit.

However, Covid restrictions contributed to a 49.1% rise in spending on online takeaway orders, while meal subscription services jumped 62.4%.

Demand for at-home entertainment pushed spending on digital subscriptions up 31.5%, while money spent on electronics including game consoles rose 10.8%. Meanwhile, general online retailers benefited from a 52.5% hike in spending.

Raheel Ahmed, Barclaycard’s head of consumer products, said: “2020 has accelerated many trends. E-commerce has seen huge growth, working from home has meant many are shopping more locally, and experiences within the home, such as virtual workouts, have become the norm.”

Travel spending, including on airlines and travel agents, tumbled 61.1% in August and 63.1% in September, as coronavirus restrictions and quarantine rules took their toll.

“Hopefully with a vaccine being rolled out in 2021 we will see green shoots for the most severely impacted sectors,” Ahmed said. “Having said that, some of the trends and changes we have seen in customer habits may be here to stay.”