UK DIY News
Asda Income Tracker shows £6 a week drop in family spending power
Family spending power fell by £6 a week in April 2012 – leaving the average UK family with £144 of weekly disposable income, 4.2% down from the same time last year, according to the latest Asda Income Tracker.
While this is the joint-lowest that weekly discretionary incomes have been since November 2008, the latest movement in the Income Tracker is an improvement on previous year-on-year declines. A £6 annual decrease is the smallest since March 2011.
Growth in the cost of living slowed notably in April – to the lowest rate in 19 months. The consumer price index (CPI) rose over the previous twelve months by 3.0%, down from 3.5% annual inflation in March. Annual growth in the price of essential items also slowed in April to the lowest since July 2010.
As well as those that are in work seeing small year-on-year salary increases, well below inflation, tough conditions in the labour market mean unemployment is still having an impact despite slight year-on-year improvements in the headline rate.
Balancing the two conflicting elements, family income growth is still very fragile, with the improving cost of basics overshadowed by the high number of workers remaining unemployed. Family finances are likely to remain constrained for some time yet, said Asda.
Despite some recent improvements in the cost of utilities and food with a drop in wholesale prices and energy providers making cuts to bills in March, they are still two of the main factors putting pressure on discretionary spend. Electricity and gas charges were 8.1% and 15.4% higher in April than twelve months before, while food costs rose by 4.3% over the year.
The cost of getting around continues to be a significant pressure in April, with petrol and diesel prices continue to set new records and were 4.9% and 4.2% higher in April than a year before as cost prices remained high and the benefit of supermarket price cutting is yet to kick in. However the cost of a barrel of crude oil has fallen over the past month, which could feed through into lower prices at the pump later this year.
Andy Clarke, Asda president and CEO, said: “Although the cost of essentials has fallen and declines in disposable income have slowed, the underlying story is not as positive as it first appears.
“In real terms UK families have less cash in their pockets now than they did a year ago – and when you take a two-year view it’s clear we’re facing the longest consecutive decline in disposable income since the 1920s. We see customers adapting their behaviour to a ‘new normal’, making every penny count.
“In this environment holding down prices has never been more important. We’re firm in our commitment to help tackle this as family finances remain tougher than ever before.”
Source : Talking Retail
www.talkingretail.com/news/industry-news/family-spending-falls-6-on-like-for-like-basis-reveals-asda
Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.