Easing of lockdown fuels surge in UK consumer spending: Deloitte

Deloitte’s analysis is based on responses from more than 3,000 UK consumers between March 19 and 22, 2021, as the UK’s phased lockdown easing remained on track.

“The UK is primed for a sharp snap back in consumer activity. High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months,” said Ian Stewart, chief economist at Deloitte.

In an encouraging sign that consumers are preparing for further lockdown easing, discretionary spending grew this quarter, albeit by 1 percentage point. With late June earmarked for the last of social distancing measures to lift, consumers expect to increase their spending across almost every essential and discretionary category. Net discretionary spending is anticipated to become positive for the first time, meaning the number of consumers expecting to spend more exceed those anticipating to spend less, said the report.

Reflecting consumer eagerness to spend, ‘going to a shop’ topped the list of leisure activities consumers are most likely to do after lockdown, with 63 per cent saying they would plan to return within a month of measures lifting.

Ben Perkins, head of consumer research at Deloitte, commented: “Mass remote working will continue to impact footfall on the High Street. Shopping behaviours have changed significantly during the pandemic, with some consumers discovering the convenience of online retail for the first time. It’s likely that many of these changes will continue beyond the end of the pandemic. Whether shopping online or in-store, though, if consumers remain confident about their income, then an increase in consumer spending could become the driving force for growth as the economy reopens.”

The start of the pandemic in Q1 2020 saw economic sentiment plunge to an historic low. However, armed with a clear map out of lockdown, extended furlough support through to the autumn, and the vaccination programme continuing, consumer sentiment on the state of the economy grew to -61 per cent, a quarterly rise of 12 percentage points, according to the Deloitte Consumer Tracker.

Fibre2Fashion News Desk (KD)