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Belfast Telegraph

Has COVID-19 forever changed our spending behaviour?

As we make the tentative steps into the next stage of economic recovery and reopen more parts of our economy, the high street is slowly beginning to bustle again with activity, as shops, pubs and restaurants welcome customers’ return.  While this is cause for optimism, businesses are operating under a very different set of circumstances, with limited capacity and additional protective hygiene measureAs the restrictions eased, I, like many others, used this opportunity to venture out to Belfast city centre for the first time in three months and the change in behaviour was very noticeable.  It made me wonder about the implications of these changes in behaviour in the longer-term.

At the macro level, ensuring there is a steady flow of custom is the primary challenge.  An Ipsos MORI survey found that 40% of people felt uncomfortable shopping in stores other than supermarkets; and 60% felt uncomfortable going to pubs or restaurants, highlighting a potential significant shift in our behaviours.  The level of discomfort noted around attending shops in consumer sentiment surveys is mirrored in an increase in online spending.  Over the past few months’ consumers have shown a greater preference to shop online in comparison to this time last year.  Data from the Office of National Statistics (ONS) showed that as much as 33% of all retail sales that occurred in May 2020 were made online; compared to only 19% in May 2019.  This might be purely a temporary ‘lockdown effect’ but it is more likely to be a stickier trend.

Another consequence of Covid-19 and the associated hygiene initiatives has been an increase in card use over cash.  In total, the number of card transactions, according to UK Finance, were almost 5% higher in March 2020 compared to March 2019.  For high street businesses, this move away from cash towards cards brings additional costs, via transaction fees.  With an increasing choice of card transaction processors available, it could be timely for businesses to shop for the best deal. 

The Chancellor’s recent statement gave us an insight into how the UK Government is aiming to bring us back to the high street, with a VAT cut and the ‘eat out to help out’ scheme introduced to encourage people to reengage with the high-street and help those sectors that have been hardest hit by the lockdown.  There has been much written about creating a different economy post Covid-19.  For now, it seems like the immediate priority is to rekindle what we had before, with consumers at the forefront.  For that, a belief that it’s safe and everything has returned to ‘normal’ will be the key driving force.