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Discretionary income suffers the biggest drop since records began as customers change behaviour to beat inflation

  • Asda’s Income Tracker reveals the average UK household saw discretionary income contract by £40.38 a week – amounting to £161.52 per month
  • Household discretionary income declined for the sixth consecutive month
  • Half of Asda’s customers are worse off financially now compared to 12 months ago
May 27, 2022 03:10pm
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  Household income (weekly average) Y-o-Y% change Essential spending (weekly average)            Y-o-Y% changeHousehold discretionary income (weekly average) Y-o-Y% change

Households across the UK saw an unprecedented squeeze on discretionary incomes last month, with the latest figures from Asda’s Income Tracker* revealing a drop of £40.38 per week year-on-year.

The average household now has £205 per week at its disposal after taxes and essential bills are paid, with mounting costs having the greatest impact on those aged under 30 and over 75.

Living standards are increasingly under pressure, as essential spending on groceries, bills, fuel, rent and mortgages amounted to £528 per week. This was up £53 a week when compared with the same period in 2021, largely driven by the increase in Ofgem’s price cap, which saw gas prices increase by 95% and electricity rise 53% last month.

Household discretionary income fell for the sixth consecutive month in April, regressing to levels not seen for three-and-a-half years (Oct 2018: weekly average £205).

A survey of 1,000 Asda customers found they have begun to adjust their behaviour to cope with financial uncertainty, safeguarding against further price increases by stocking up on offers and cupboard essentials (42%), or making the switch to purchase at least one own brand product to save cash (86%).

A third also revealed they were making active changes to their shopping habits, cutting out top up shops or combining a trip to the supermarket with other activities to save on fuel costs.

Half of those surveyed said they felt worse off than they did a year ago, rising to 63% of shoppers who predict they will be impacted by the cost of living crisis in the coming 12 months.

The behavioural shift comes as the first products from the supermarket’s budget-friendly Just Essentials range land on shelves this week as a result of a £90m investment aimed at giving customers a value-focused option across 300 products, as well as dropping and locking the price of more than 100 family favourites until the end of the year. The investment is in addition to the grocer’s commitment to keeping prices low which sees it regularly named as the cheapest ‘Big Four’ supermarket according to numerous independent price checks.

In a further measure to help combat inflation for customers and colleagues, the retailer has reinstated its offer of 10% off for Blue Light Card holders and will give colleagues access to a 10% discount across grocery and George purchases from the day they join the company.

Please click here for the latest Income Tracker report.

* The Asda Income Tracker is a measure of ‘discretionary income’, reflecting the amount remaining after the average UK household has had taxes subtracted from their income and bought essential items such as: groceries, electricity, gas, transport costs and mortgage interest payments or rent. The Income Tracker measures the amount left over to spend on discretionary purchases such as leisure and recreation goods and services.

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