Spending recovery continues, despite renewed restrictions

Spending increased again in October.Spending increased again in October.
Spending increased again in October.
Scotland’s spending recovery since lockdown lifted in July remained strong last month with spending up eight per cent year on year, despite tougher restrictions in place across the country, a report has found.

The latest Bank of Scotland Spending Power Report also said that spending in supermarkets soared as people prepare for a winter indoors, up 26 per cent year on year. This marked the 8th consecutive month of plus 20 per cent year on year growth, coinciding with the first national lockdown.

The study fond that, reflecting limited opening times for the hospitality sector in October, and even tougher measures in place across the central belt, spending in restaurants fell for the first time since July five per cent year on year. Furthermore, the amount spent on recreational activities, such as cinema and theatre visits, shrunk 18 per cent year on year as the sector continues to struggle in the wake of closed and empty venues.

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There has also been no sign of people rushing back to book holidays for next year, with spending still down 57 per cent compared to October 2019.

However, strong growth in spending in home stores and electrical stores – both up 44 per cent compared to last year - alongside an increase of 41 per cent at other retailers, such as online marketplaces, in October helped push non-essential spend to growth for the third successive month.

However, typical commuter spending in October was hit hard, with fuel spend down 14 per cent compared to a year ago, having recovered to 10 per cent down on last year just a month earlier. Furthermore, the amount spent on public transportation plummeted 60 per cent year on year, versus a 51 per cent fall in spending in September.

Gabby Collins, head of payments at Bank of Scotland, said: “The introduction of a new tiered system in Scotland in November to tackle the pandemic, along with the announcement of regions moving into Tier 4, will likely have an impact on national spend through winter. However it’s too early to say how pronounced that impact will be.

"While the future remains uncertain, the hospitality and retail sectors will be hoping to take advantage of a spending splurge closer to Christmas, even if that moves online.”

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