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Family spending power falls 5.1% in June


The average family was £9 per week worse of in June 2011 compared to the same month last year, according to the latest Asda Income Tracker.

UK households typically had £167 of discretionary income available each week during the month, representing a 5.1 per cent decrease year-on-year, but this compared favourably with May’s record £14 drop in spending power.

June coincided with consumer price inflation falling to 4.2 per cent and average earnings rising to an annual rate of 2.1 per cent, which eased the financial pressure on shoppers, but the rising costs of transport and other utility bills had the opposite effect.

Asda President and CEO Andy Clarke said: “Nationally, shoppers’ disposable incomes are still down year-on-year.

“While it’s a relief to see a significant improvement on last month’s record drop, only time will tell whether this is a one-month blip or the beginning of a trend.”

Recent figures published by data insight company Experian Footfall show there are stark differences between the regions across the UK in terms of shopper numbers on the high street, and this trend is reflected in Asda’s latest survey.

According to the study, London and the south-east were the top two regions in terms of discretionary spending power in the second quarter 2011, with the average Londoner having £283 per week left over.

In contrast, consumers in Northern Ireland and the north-west of England had a larger hole in their budgets, with shoppers in the former having just £80 per week in Q2.

Charles Davis, Managing Economist at the Centre for Economic & Business Research, which helped compile the research, suggested that there were some positive signs for consumers in June, although times remain hard.

“Some pressure eased off household finances in June, as the price of several discretionary items fell and average earnings growth picked up marginally - price discounting by retailers has pushed down the price of toys, books and electronic goods,” he explained.

“Nevertheless, the Asda Income Tracker shows that spending power remains down on a year ago as the price of essential goods continues to rise.

“Utility price increases later in the year mean the UK consumer is not out of the woods yet and we could see inflation rising again over the coming months.”

Published on Wednesday 20 July by Editorial Assistant

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