Although spending power has increased and inflation decreased, new insight from Asda shows that shoppers are still struggling with affordability.
The rising cost of food and other items actually means that the amount customers can spend per week fell by £3 from March to August. That data point offsets somewhat upbeat news and is among many highlighted in Asda’s Income Tracker.
“Recently implemented policy changes, such as the uprating of social security benefits and increases to the National Living Wage boosted gross household incomes but were insufficient to prevent a monthly decline in the Income Tracker in April,” the report noted.
The Income Tracker actually showed a £0.37 gain year over year, but Asda noted that “the return to growth should not be taken as evidence of the end of the cost-of-living crisis.”
That is part of the reason why Aldi and Lidl continue to make strides in the UK … because cost of a weekly spend is less expensive. It’s also why rivals continue to hold the line when it comes to pricing of many items. Asda has been one of the leaders among those considered “traditional” chains thanks to its massive selection of own-brand lines and its in-house meal discount for kids.
Inflation declined to 8.7% in April, continuing a positive economic trend for consumers. But because of tenuous supply chains and energy costs, they’ve been forced to absorb some of the costs when spending. Realizing the tightening budgets, they’re looking for any bargains and discounts they can get. Asda has a price lock on more than 500 items. Many other big retailers have chosen to do the same to try to stay in good graces with them while keeping pace with deep discounters.
Meanwhile, nearly 5 million customers are using ASDA’s loyalty rewards programme. These initiatives can be a boon for retailers if positioned correctly.
The group with the least amount of disposal income are those families between the ages of 30 and 49. Theirs dropped by 3.4% over the past month. But Asda researchers expect them to gain back income once inflation levels off.
The group doing the best in terms of growth are those over 75, who have been helped by rises in state pensions. However, they also bring home the least relative to all other age groups.