How lucky is the number 13?
Well, for British consumers – beset by inflation, a pandemic and ‘less-is-more’ offerings from retailers and restaurants since 2019 – as long as it isn’t negative, it must be good news.
Indeed it is. The latest data presented by Asda in its Income Tracker, shows that family spending power increased by £13.13 per week in January or 6.1% year-over-year, the best result in more than 18 months. It is the 10th consecutive month that spending, now at an average of £230 per week, has moved higher.
“January’s Income Tracker results were the strongest for some time,” said Sam Miley, Managing Economist and Forecasting Lead at Cebr who produce the Income Tracker on behalf of Asda. “This improvement was driven by a number of factors, including continued earnings growth, weaker food price inflation, and the recent cut to National Insurance contribution rates. Cebr expects spending power to continue growing in 2024, supported by a generally more positive economic outlook.”
That is both great news for consumers and for those who operate grocery store chains and foodservice outlets, as well as growers and wholesalers. The more money to spend, the more gets distributed up and down the supply chain.
The monthly increase to those budgets of £5 was also the most since July of last year. The more robust £230 per week total for households is a far cry from the £190 most families had just two years ago.
Annual inflation is also down to 4% while core inflation remains at 5.1%. Food and drink and foodservice have been two of the biggest contributors to rising inflation and remain a sticking point for those doing their shops.
While the numbers are fairly cheery for high-income earners and those in the middle class, who have seen a soaring increase their take-home pay by 15.6% year over year, those in the lower income classes are still hurting. Their incomes actually fell -0.5% since the same period last year for a total decrease of £69 per week. (Check out more details on the Asda Income Tracker.)
So efforts being made retailers like Aldi and Lidl – and the bigger ones who are trying to price-match them and offer discounts – are absolutely being embraced at store level.
Asda is doing its part by not only lowering prices on products – 287 of them to equal the deep discounters with 17% reductions – but also boosting the number of convenience stores it is opening. It plans to finish the launch of 110 Asda Express stores in February, a record for a single month. It goal is to surpass 1,000 UK stores.
