UK consumer spending is expected to fall by £183.6 billion (14.9%) this year due to Covid-19 lockdowns, but alcohol and non-alcoholic drinks are set to be the top sectors for increased consumer spend through 2020, according to new research by Mintel.

The flagship British Lifestyles report by Mintel shows the biggest decreases have occurred in the transport, foodservice and holiday industries. Consumer spending in these three sectors will fall by £140.1 billion in total, or just over £5,000 per household, representing around 77% of the overall decline in consumer spending this year.

Meanwhile, the three sectors that will experience the biggest increase in consumer spending this year – totalling £11.2 billion, or just over £400 per household – are food, alcoholic and non-alcoholic drinks purchased at ‘ retail channels’, such as supermarkets, to be consumed at home.

Alcoholic drinks is pipped to see the biggest percentage change for 2020 versus 2019, according to Mintel, with a rise of 16.3% of £3.6 billion. Non-alcoholic drinks will be up by 5.7% or £0.7 billion compared with 2019.

Jack Duckett, Mintel Associate Director of Consumer Lifestyles Research, said: “The Covid-19 lockdowns have had a profound impact on consumer spending, decimating the transport industry, and broader travel and leisure sectors. But some sectors have benefited from the lockdown, with retail sales of food and drink boosted as all eating and drinking occasions moved into the home.

“Although consumer spending will recover from this year’s astonishing £180 billion drop, it will undoubtedly be a long path to recovery: Mintel forecasts suggest that pre-Covid levels will not return until 2023 at the earliest.

“We estimate that retail value sales of alcoholic drinks will grow 16% year-on-year – the fastest growth rate experienced for at least a decade – to reach £25.5 billion in 2020, as people trade nights out for evenings in. In particular, the current recession opens up opportunities for premium own-label drinks to grow in popularity. Learning from previous recessions, consumers know that one way of cutting back is to buy private label. In fact, 18% of premium alcoholic drink buyers would buy premium own-label drinks if their financial position worsened.

“The growth in the size of the older population over the next five years, and the fact that they are most likely to be insulated from the financial impact of the pandemic, makes targeting the ‘grey pound’ particularly timely for all brands including alcoholic drinks. A long heritage (40%), being aged for longer (40%), not being mass-produced (34%), and extra care in production (27%) are all factors that feed into over-55s’ perception of what makes an alcoholic drink premium.”

“The last recession created a boom in the private label market, and supermarkets have improved their private-label offerings in the intervening years, with a significant expansion of ranges. In the mid-term, more cautious and value-seeking shoppers will further fuel the pre-existing shift in the food and drink market in favour of private label.”