UK consumer spending wilts even as new lockdowns spur stockpiling

FILE PHOTO: Shoppers wearing protective face masks queue outside a Tesco supermarket as they follow social distancing rules in West London as the spread of the coronavirus disease (COVID-19) continues, in London, Britain, March 26, 2020. REUTERS/Toby Melville

LONDON (Reuters) - Consumer spending, a rare bright spot for Britain’s economy during the coronavirus pandemic, faded in October although the re-introduction of lockdowns prompted a renewed stockpiling spree, surveys showed on Tuesday.

Payment card provider Barclaycard said overall consumer spending slipped 0.1% in annual terms in October as people cut back on non-essential spending while stocking up on groceries.

Another survey from the British Retail Consortium (BRC) similarly showed spending was skewed towards food sales.

Barclaycard said spending on essentials jumped 4.2% in October as a third of people it surveyed said they were stockpiling ahead of potential shortages during lockdown.

Scotland, Wales and Northern Ireland enacted new COVID-19 health restrictions last month and England began a one-month lockdown last week to curb a second wave of a pandemic that has left the United Kingdom with Europe’s highest death toll.

The Barclaycard and BRC surveys chimed with business surveys last week that showed the economy slowed sharply in October, although news on Monday of the effectiveness of a Pfizer/BioNTech vaccine could help to lift confidence.

The BRC survey showed retail spending - which accounts for about a third of all consumer spending - rose by 4.9% in annual terms in October.

“Tightening restrictions across the United Kingdom and speculation towards the end of the month of an England-wide lockdown prompted customers to stock up on home comforts and food supplies,” said Helen Dickinson, chief executive of the BRC.

Reporting by Andy Bruce; Editing by William Schomberg