Credit, Collections & Insolvency News
New analysis has shown that essential household spending holds has held firm with no change year-on-year but also indicates signs of belt-tightening according to a ‘Spending Tracker’ by Snoop.
Despite overall spending across the period increasing 14% year-on-year, the analysis shows the significant impact the Coronavirus (Covid-19) has had on many sectors.
Hospitality, travel (-70% year-on-year) and transport (-55% year-on-year) have been among the hardest hit as a result of the Covid-19 lockdown, but the tide is turning on the sea of red as spending begins to show small signs of recovery from historical lows.
Spending on transport, down 55% compared to this time last year, has started a tentative recovery with an increase of 24% (m-o-m), as more and more people return to work.
The travel and tourism industry has been decimated as a result of the restrictions on travel. Spend was 70% down y-o-y, 60% down over the past three months, and 22% down in May compared to April.
Charitable donations look to be resilient year-on-year, in part due to campaigns for NHS Together and similar causes linked to the devastating pandemic. The direction of travel for donations doesn’t look rosy on a month-by-month basis (-40%) but the coming months will reveal whether that’s a temporary blip or a downward trend.
Scott Mowbray, Snoop co-founder, said “The good news is, overall, household finances have been resilient and there’s clear evidence of a ‘pay the bills first’ strategy, with spending on home & family, including mortgage repayments, rent and bills, unchanged year-on-year. The reduction in spending seen in the past three months and month-on-month is partly a result of customers switching to better deals on their household bills, as well as a general tightening of the belt, which is to be expected.”
“The data shows the extent of the challenges facing households and businesses because of the Covid-19 shutdown. The numbers as they stand are less important than what emerges in the coming weeks and months as households react and businesses adapt to a new normal shaped by physical distancing. We will be following these emerging trends carefully to ensure we can support consumers and help them make every penny count.”
The ‘household Spending Tracker’ is based on over 18 million transactions and £1.3 billion of consumer spending between May 2019 and May 2020.
