Consumer spending fell 13.8% year-on-year in February, according to data from Barclaycard, although some sectors saw record growth as coronavirus lockdowns continued to influence spending habits.
The card transaction processor said spending on essential items was ahead 5.3% in the month, boosted by food and drink specialist stores, which saw record growth of 63.3%, which was 7.5% higher than reported in January.
Supermarket expenditure was up 17.4% overall, with online grocery spend surging 115.2% as many consumers continued to rely on home deliveries for food shopping.
Fuel spend, however, declined 30.2%, as travel restrictions and working from home kept commuters off the roads.
Barclaycard said that, as much of the high-street remained closed, spending on non-essential items declined 22.1% year-on-year.
The hospitality and leisure sector also had another challenging month, with overall spend down 68.9% compared to February 2020.
Within that category, pubs and bars saw a 95.7% decline, while spending at restaurants fell 84.6%.
Spending at discount stores was described as a “bright spot”, up 32.3%, as more than half of people surveyed said they had become more careful to seek out value in the purchases they made.
In an ongoing lockdown trend, spending on digital subscriptions and takeaways rose 42.6% and 30% year-on-year respectively, as couples celebrated Valentine’s Day with date nights at home, and a fifth ordered a takeaway to mark the occasion.
The data showed that with spring approaching, home improvement and DIY spend saw a 10.3% increase, while furniture stores saw a smaller year-on-year decline in February than in January at 4.5%, compared to 14.6%.
That came as 35% of those wanting to spend more on spring cleaning said they were planning to purchase furnishings to redecorate or update a room.
Online retailers also continued to see strong growth, with online sales accounting for 53.7% of all retail spend in the month.
Spending at online general retailers increased 100%, while online specialist retailers, including florists and jewellery stores, saw 95.9% growth as consumers bought presents for Valentine’s Day and lockdown pick-me-ups.
Barclaycard said almost a quarter of those surveyed said they were more willing to spend on treats for themselves and family compared to last month.
Confidence in household finances held up at 68%, with more than 40% of consumers saying they had saved more money than usual since the pandemic began.
However, it said many were already thinking about where to spend their savings, with a fifth of those who had saved more than normal saying they would take a “big holiday”, and 13% planning to “treat themselves to something nice”.
Meanwhile, confidence in the wider UK economy rose 4% from January to its highest point in the last 12 months, at 28%.
“Despite a very challenging environment, it’s inspiring to see many retailers remaining resilient and doing what they can to maximise online sales while physical stores remain closed,” said Barclaycard’s head of consumer products, Raheel Ahmed.
“In addition, as we all spend more time at home, we’ve seen home subscription services, fresh food boxes and meal-kit services become a popular mainstay of life in lockdown.”
Ahmed said the start of spring, the government’s roadmap out of lockdown, the vaccine roll-out and the extension to the stamp duty holiday were contributing to a “lift in the nation’s spirits”.
“With consumers generally feeling more optimistic, there is a strong indication of a more prosperous period to come as the long-awaited recovery and life after lockdown begins.”
