Families squeezed as spending falls
3 October, 2011
Families are feeling the tightest squeeze on discretionary spending for years, new data from an influential retail tracker shows.
The Asda Income Tracker found that UK families were £14 a week worse off in August 2011 compared to the same month in 2010. Nine in ten people surveyed for the tracker said they felt things were tougher than a year ago, with utility and fuel prices placing the biggest pressure on disposable income.
The news confirms what restaurant and pub operators have known for some time—that customers are watching their spending and competition for their money has never been tougher.
The £14 fall is the largest monthly drop since Asda started its tracker at the start of 2007. It left families with an average of £162 a week of disposable income. Families were also hit by the continued high rate of inflation, which rose to 4.5% in August—well above the earnings growth experienced by most people.
Asda’s research found people feeling frustrated by the squeeze. Around four in five agreed that the government should take action to put more money pack into people’s pockets, with two in five calling for a freeze on energy bills.
Asda chief executive Andy Clarke said: “It’s clear from this record drop in disposable income that British families have never had it so tough. Our customers are feeling the pinch—they’re clear they want more help to make ends meet.”
Charles Davis, managing economist at tracker provider Cebr, said the situation wasn’t likely to improve any time soon. “With the UK economy in a particularly precarious state at the moment, things could get worse before they get better.”
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