Consumers have more spending power at grocery stores than last year, thanks to rising income levels decelerating inflation.
In fact, Asda’s most recent Income Tracker showed that average families are earning £31.33 per week more than they did a year ago. Their take-home pay, a more than 15% boost year over year, is the best it has been since September 2021.
“The Income Tracker continues to improve, with discretionary income increasing to £239 per week,” says Pushpin Singh, Senior Economist at Cebr. “This improvement continues to be driven by several factors, not least elevated nominal earnings growth, easing inflation, the uplift in the National Living Wage, and tax policy changes. Cebr anticipates spending power to see further improvements in 2024, bolstered by the relatively strong growth momentum seen in Q1 2024.”
However, all groups are not created equal. While disposable income for the lowest earners has jumped by 12.6%, they are still scuffling with affordability as costs of goods and high bills are leaving them £66 short on average each month.
Food inflation, which had been sky high during Years 1 and 2 of the COVID-19 pandemic, has eased significantly. The Bank of England noted that inflation has dipped to 2.0%, helped by lower food, drink and clothing costs. Fuel and energy continues to be a trouble spot.
The highest earners are still doing the best, with Asda saying their finances have “exceeded the pre-cost-of-living peaks.”
That group might not need reduction in prices, but they have been welcome for the rest of families in the UK. Asda has been one of the many retailers chipping in by price cutting hundreds of items by more than 10% on average. That has included an array of fresh fruits and vegetables.
For more on the findings from May, check out the Income Tracker here.
