Asda Income Tracker: UK families had £201 in discretionary income to spend in August

LEEDS, England, 2016-Oct-03 — /EPR Retail News/ — UK families had £201 in discretionary income to spend in August according to the latest figures from the Asda Income Tracker, released today (30 September 2016).

The figures mark the 22nd consecutive month of double-digit growth in pound terms, with households benefiting from an extra £10 per week compared to the same period last year.

But whilst the positive figure suggests good news for spending power year on year, the data also shows that the rate of growth has slowed month on month in 2016, with disposable income staying largely flat for the past five months.

While essential item inflation has remained at near-zero levels and Consumer Price Inflation is holding steady at (0.6%), rising input costs and slowing wage growth mean that monthly spending power is not growing as quickly as seen previously.

Other factors impacting spending power are increased transport costs – up 0.9% over the month of August and an increase of 0.9% in food prices. Families searching for flights to warmer climates were disappointed with airfares rising for European routes. Meanwhile, manufacturer costs climbed at the fastest annual rate in almost five years, suggesting that further inflationary pressure could be around the corner.
The report also suggests that as prices are expected to continue to rise, headline inflation will move towards the Bank of England’s 2% target for 2017.

On the plus side, the report, compiled each month by CEBR, noted that a cut to interest rates helped to offset the rising costs and resulted in a further fall in monthly mortgage payments. And the uncertainty – triggered by the results of the EU referendum – doesn’t appear to have impacted shopper behaviour at the tills.

In the labour market, the picture also remained relatively positive, as the rate of unemployment across the UK held steady at 4.9% and wage growth remained well above the level of inflation. However, records show that regular earnings growth (excluding bonuses) dropped to the lowest level since the start of 2016 (2.1%), despite the introduction of the National Living Wage in April.

An Asda spokesperson said: “This month’s report is a mixed one for families. On the one hand it’s encouraging that we continue to see a rise in spending power, courtesy of low levels of essential item inflation, and cuts to interest rates. However, on the other hand, there are some trends beginning to emerge that consumers should be mindful of.

“With inflation predicted to creep up as we head towards 2017 and the potential for a continuation in the rising costs of some essentials, families will be watching their wallets with interest over the coming months.”

Sam Alderson, Economist, Cebr, said: “UK households have continued to help to drive economic activity in the months following the referendum, clearly supported by further robust increases in household spending power.

“However, whilst the initial turbulence has been navigated, improvements in household finances have slowed, a process that could accelerate if rising production costs begin to feed into prices at the tills.”

Source: ASDA

Asda’s July Income Tracker: UK families had £10 more disposable income in their pocket compared to the same time last year

LEEDS, England, 2016-Sep-02 — /EPR Retail News/ — UK families had £10 more disposable income in their pocket compared to the same time last year, according to Asda’s July Income Tracker.

The average disposable income for UK households reached £202 a week, an increase of 5.4% compared to July 2015.

While the latest figures mark the 21st consecutive month of a double-digit rise in spending power, the data indicates that growth has slowed to its lowest rate since October 2014. This decline has been driven by a rise in essential item inflation (0.1%) and a slowdown in wage growth.

Asda’s Income Tracker also shows that there is a growing divide between the highest-earning and lower income households in the UK. In July 2016, the wealthiest 20% of UK families earned an average of £1,890 per week – ten times more than the lowest-earning 20%, who took home £180.

Furthermore, the gross income of the highest-earning households has grown by 2.3% since July 2015 – nearly eight times more than the lowest households.

A breakdown of gross income per bracket with percentage increase (YoY) shows that:

Income Tracker August 2016

But the data highlights that it is not all good news for high-earning families. The rate of inflation in prices of items like, communication, subscriptions, family takeaways and rail travel, means the wealthiest bracket is finding itself spending increasingly more money. Middle income households meanwhile tend to devote a greater share of their income to products such as food and utilities – where prices are falling on a year-on-year basis – meaning they enjoyed the largest increase in disposable income in July, (5.5%) compared to the same time last year.

Elsewhere in the report, it states that the falling value of the pound could lead to higher import prices over the coming months, which is likely to have a knock-on effect on inflation levels as 2017 approaches.

And in the job market, the latest figures are showing that unemployment across the country remains at its lowest level (4.9%) in 11 years.

An Asda spokesperson said: “Our Income Tracker has made for some interesting reading this month. On one hand, it’s encouraging to see that spending power has on average increased by 5.4% since last year, while on the other hand the data demonstrates the significant gap between households when it comes to discretionary income.

“Falling food and drink prices (-2.6%) provided a welcome relief to families’ wallets across the board, and with wage growth remaining above inflation levels for the time being, households are likely to make the most of this again next month”.

Sam Alderson, Economist, Cebr, said: “Household spending growth hung in double digits in July, which -alongside brighter weather – helped to support a strong month of retail spending.

“Despite falls in confidence, the continued improvements in household finances have helped families shrug off much of the post-Brexit concern that has plagued businesses and financial markets. However, the outlook may not be so bright as rising inflation through into 2017 could place significant pressure on household budgets.”

Source: ASDA

Asda’s Income Tracker: The average UK household had £200 a week of discretionary income in April

  • The average UK household had £200 a week of discretionary income in April – £12 more than in April 2015 – and the highest figure recorded since the Asda Income Tracker began in 2008
  • Year-on-year growth in spending power has remained above £10 per week for a full year and a half, marking 18 consecutive months of double-digit growth for families’ bank accounts
  • While wage growth slowed slightly, a drop in inflation last month helped to ensure another boost to spending power

LEEDS, England, 2016-May-31 — /EPR Retail News/ — Family bank balances received another boost in April, with discretionary income reaching £200 a week according to Asda’s latest Income Tracker – an all time high since the tracker was established in 2008.

The data revealed that families enjoyed a £12 (6.3%) a week boost to spending power compared to April last year, with this rise marking the 18th consecutive month of double-digit growth.

Contributing to this latest increase in disposable cash was a fall in the overall levels of inflation. Consumer price inflation dropped to 0.3% – the first fall in the headline rate of inflation since 2015 – while essential item inflation fell by -0.2%, helping to mitigate the effects of slowing wage growth.

In fact, annual wage growth for families remained below the levels recorded a year ago, in spite of regular pay increasing by 2.1% between January and March. However, this is likely to change in the coming months following the introduction of the National Living Wage in April.

Looking across other areas affecting inflation, there was an annual drop in the price of transport (-1.3%) and vehicle fuels (-7.5%). And it wasn’t just domestic travel that benefitted last month. With a 3.2% fall in the cost of air transport prices over the past year, it gave holiday-makers a great opportunity to escape to warmer climates.

Meanwhile, changes to social housing rents also contributed to the overall drop in inflation. Following the Government’s announcement last summer, housing associations have started to cut social housing rents by 1% annually from April this year.

In contrast, prices for cultural events and services rose by 3.8% between March and April, making it more costly for those families heading to the cinema or streaming their favourite series. However, food and drink prices are down -2.5% on last year, helping to ease the impact of these price increases.

Overall, the April Income Tracker demonstrates that as discretionary income continues to grow month on month, the outlook for households remains positive. This is despite uncertainty in business confidence due to the upcoming EU Referendum.

Andy Clarke, Asda president and CEO said: “April was the first time that discretionary income reached the £200 level since the Asda Income Tracker began, which is a significant milestone for consumer spending power. Double-digit growth in household income is clearly good news for UK consumers, although we continue to see them take a prudent approach to spending on every day items.

“Looking ahead, the outlook remains cautiously optimistic, which is encouraging and should give consumers a boost as we head into summer. Although, whilst inflation is likely to recover over the coming year, the uncertainty over the EU referendum makes it difficult to forecast long term consumer confidence.”

Sam Alderson, Economist, Cebr, said: “Uncertainty surrounding the outcome of the UK’s referendum on EU membership and the underlying health of the British economy have weighed heavily on the confidence of businesses in recent months.

“In contrast, the continuation of increasing household spending power has helped keep consumer confidence robust. As such, activity in the consumer side of the economy appears to have ridden the series of turbulent economic waves seen since the start of the year much better.”

Read the full report here.

The average UK household’s weekly disposable income up £12 in January 2016 vs January 2015 – Asda

  • The average UK household had a weekly disposable income of £197 in January, up £12 on January 2015
  • Annual growth in spending power fell for the fourth consecutive month – due to a slow down in wage growth and a continued increase in inflation
  • Still, as household incomes continue to increase faster than the cost of essential items, outlook for UK family spending power remains positive

LEEDS, England, 2016-Mar-03 — /EPR Retail News/ — Families across the UK enjoyed another double-digit increase in spending power in the first month of the year, according to Asda’s latest Income Tracker. As employment across the UK continued to rise, the average UK household discretionary income reached £197 a week in January 2016, up £12 (6.7% year-on-year) compared to the same time last year.

However, the latest findings also revealed that, while bank accounts continue to receive a boost, January marked the fourth consecutive month where the year-on-year rate of spending power growth has fallen, thanks to a slowdown in wage growth and a steady increase in inflation. While the economic outlook remains relatively positive, Asda’s latest Income Tracker suggests that a slowing rate of recovery is having a knock on effect on British purse strings, with disposable income set to continue to grow at a slower rate than those seen through much of 2015.

Things are looking up for job seekers across the UK, with employment figures of 74.1% being at their highest rate since before the financial crash. Yet, wage growth continues to slow, with average weekly earnings rising by just 2.0% year-on-year.

Inflation is also impacting on purse strings. Despite deflation shaping the cost of many household goods, and outgoings including petrol down, overall inflation has grown for a third month in a row – now at its highest since January 2015, reaching 0.3%. What’s more, this trend is predicted to continue in 2016, though the overall rate of inflation is expected to remain relatively low with falls in oil prices and other commodities set to continue and a competitive retail environment likely to place downward pressure on prices.

Still, it’s a positive picture for families across the UK, with average household income continuing to grow considerably faster than the cost of essential items. In the first month of 2016, the year-on-year price growth for essential items remained steady at -0.1%, with prices falling between December and January on items including food, drink and fuel, as well as clothing a footwear thanks to the early New Year sales. All welcome relief for families as they look to spend more on activities together, such as eating out, in 2016.

Some transport costs have also had a surprisingly positive impact on pockets. Those looking to escape to warmer climates and make the most of cheaper overseas travel in January, were in luck with a considerable fall in transport costs. In contrast to December 2015 when travellers faced a sharp price hike (46%) in airfares over the festive period, last month fares dropped significantly compared to the same period last year. Prices were 2% cheaper year-on-year, helping to provide a healthy boost to holiday spending money to combat the January blues.

Andy Clarke, Asda President and CEO, said: “Another double-digit increase in disposable income in January gave a welcome financial boost at a tough time of year. In juxtaposition, annual growth in spending power fell year-on-year for the fourth consecutive month.

“The good news is that the outlook for 2016 is positive for UK households, with incomes increasing and employment buoyant. Whether families choose to save their extra income or boost spending on leisure, treats or everyday essentials remains to be seen. The good news for consumers is that the competitive retail environment is translating to lower prices across the board.”

Sam Alderson, Economist, Cebr, said: “Although growth in family spending power has declined in the latest data, the overall picture is positive. UK consumers have much more money to spend than a year ago.

“We expect continued falls in unemployment as well as rising earnings growth over the coming months. Combined with sustained low inflation, households should be in for a good time in 2016 as far as their finances are concerned. This comes despite broader concerns over the strength of the UK economy.”

Read the full report here.



British spending power slows ahead of 2016 – Asda’s latest Income Tracker

LEEDS, England, 2015-12-30 — /EPR Retail News/ — Families set for a festive hangover despite double digit increase in disposable income for 13th consecutive month.

  • Average UK household had £193 of discretionary income last month, up by £14 a week compared to November 2014
  • Despite 13th month of double digit increases in disposable income, rate of growth slowed – from an average of £17 a week enjoyed throughout the rest of the year
  • 2015 review shows spend on big-ticket items up in the first three quarters of 2015, with spending on vehicles increasing 11.5% compared to 2014
  • Family fun remained a focus with spending on recreational and cultural activities rising 8.3% ahead of the festive period

With the nation ready to pop its cork on New Year’s Eve, Asda’s latest Income Tracker shows families will have something to celebrate – discretionary income reached £193 in November, up by £14 (7.7%) on the same time last year. This marks the 13th consecutive month of double digit increases.

However, as Santa steers Rudolph back to the North Pole it’s not just reindeers being reined in – Asda’s Income Tracker shows November’s £14 extra spending boost fell short of the £17 average we’ve seen during the rest of 2015, thanks to just a slight increase in inflation that is expected to continue into the New Year.

Still, the extra boost to wallets powered spending throughout 2015. Between January and September consumers spent a massive £861bn – up from £835bn for the first three quarters of 2014. But with Brits spending less on stocking their cupboards, many instead treated themselves to big-ticket items – particularly in the first half of 2015. The number of people who bought new wheels increased significantly with spend on car purchases up 11.5% compared to the first three quarters of 2014. Splashing cash on jewellery and watches also proved popular, increasing 9.1% on the same period last year.

It was out with the old around the home; with a 6.6% increase in spend on furniture since 2014. While gardens also benefitted from the seeds of recovery, with an 8.7% year on year rise in spending on gardens, plants and flowers in the first three quarters of the year.

However, shoppers didn’t limit their spending to material goods. As the festive season comes to a close, a review of Asda’s Income Tracker shows that Brits devoted more of their budget to dining out at restaurants and cafes with loved ones in 2015, up 2.1% compared to the same period of 2014.

Buoyed further by the steep fall in vehicle fuel costs, down 12.9% compared with a year ago – other recreational and cultural activities also enjoyed a boost of 8.3% in the first three quarters of 2015, with recent pantomime and party outings likely to contribute to strong growth over the year as a whole.

Asda President and CEO, Andy Clarke, said: “The good news for customers is that pressure on household budgets has clearly eased in the run up to Christmas as a direct consequence of decreases in the cost of food, fuel and energy prices. There are also indications that customer spending has shifted this Christmas with households spending less on food and drink in 2015 compared to last year and instead families are using their increased spending power on leisure and festive fun which is understandable after a period of financial uncertainty.”

Sam Alderson, Economist, CEBR, said: “While growth in spending power has slowed to its lowest level in the past 12 months, the boost is still considerable – particularly given that spending power has risen on an annual basis for over two years. Buoyed by these increases, households have increased spending over the past year – particularly on big ticket items such as jewellery and household appliances.”

You can read the full report here.



Asda’s latest Income Tracker: Brits had an extra £18 a week to spend in August compared to 2014

LEEDS, England, 2015-9-22 — /EPR Retail News/ — Families continue to enjoy spending their extra cash as Asda’s latest Income Tracker reveals that Brits had an extra £18 a week to spend in August compared to 2014.

  • The average UK household had £191 a week of discretionary income in August 2015, up by an extra £18 a week (10.7%) on August 2014
  • Fuel prices dropped by 12.9%, giving rugby fans on the road across the country a reason to celebrate
  • The cost of stocking cupboards and fridges for a big night in falls, thanks to a 2.4% drop in food and drink prices
  • Big screens and sound-bars which bring the games to fans see a 9.2% fall in price

Following opening night celebrations and a weekend of sporting excitement, Brits will be enjoying a taste of financial freedom during the Rugby World Cup, with more to spend on enjoying the games with friends and family. Asda’s latest income tracker shows that families now have £191 a week in disposable income, an increase of £18 a week (10.7%) on the same time last year.

And the good news doesn’t stop there. Those travelling the country to support their favourite teams and see the action up close needn’t give a second thought to tackling transport costs, with fuel prices falling 12.9% on August last year and the falling rate of inflation dropping back to 2.6%, making the journey to the game even more enjoyable.

Families choosing to have a big night in and watch the drama unfold from the comfort of their living rooms will also enjoy the benefits of the current economy. With food and drink prices falling by 2.4%, there’s even more reason for consumers to stock up on everyone’s favourite treats for a night in front of the TV cheering their team on!

What’s more, for those rugby fans eager to feel as if they are at the heart of the action, a 9.2% fall in the cost of audio visual equipment sees the average big night get even bigger, with the increase in spending power making it easier to convert the home cinema dream into a reality.

Chief Executive at Asda, Andy Clarke, said: “The economy continues to go from strength to strength and stability in the wider economy remains the key driver behind an increase in disposable income across the UK. Since the economic collapse there has been a shift in behaviour around spending versus saving and even though we’ve seen family’s spending power rise, households are choosing to save more money for a rainy day.

“Events such as this year’s Rugby World Cup provide economies with a shot in the arm and supporters visiting from across the world will be pleased to see that a fall in the rate of inflation across travel, hotel, sports equipment and restaurant are all contributing to an increase in disposable income.”

As more and more Brits celebrate the 10.7% rise in spending power, restaurants and bars continue to benefit from the boost in consumer spending confidence, no doubt looking to build on this as a nation of supporters gets set to celebrate and socialise by dining out.

Sam Alderson, Economist, Cebr, said: “In the wake of the global headwinds emanating from the slowdown in the Chinese economy, further evidence of strong growth in family spending power is welcome news for the UK economy.”

“Even though Christmas is fast approaching, with wages rising at rates well above inflation, households are in a great position to enjoy the autumn months and events such as the Rugby World Cup. ”

Read the full report here.


Asda’s latest Income Tracker reveals that Brits had an extra £18 a week to spend in June compared to a year ago

Asda’s latest Income Tracker reveals that Brits had an extra £18 a week to spend in June compared to a year ago, with the falling price of food, drink, clothing and outdoor living freeing up cash for some fun in the sun

  • The average UK household had £189 a week of discretionary income in June 2015, up by £18 a week on the same month in the previous year
  • The price of food and alcohol, which fell, 2.2% helped boost incomes
  • Summer fashion sales meant the cost of clothing and footwear fell by 0.4% between May and June
  • Most regions of the UK saw double digit increases in household discretionary income over the last 12 months

LEEDS, 2015-7-22 — /EPR Retail News/ — The sun has shone pound signs this summer as Asda’s latest monthly Income Tracker reveals that Brits had an extra £18 a week in their pockets in June this year. Families across the UK now have £189 a week to spend on the things they want, rather than the items they need, which is over 10% higher than this time last year.

The traditional British picnic will be saving family’s dough this summer, as the price of food was found to be 0.2% cheaper than last month and 2.2% cheaper than the same time last year. The downward effect came from a range of items including bread, jam, chocolate and confectionery. But if you’d rather toast than bread, then drink to the news that alcoholic beverages also saw a 2.2% decline in price from June 2014!

And Brits won’t be hot under the collar this summer, as the price of clothing was 0.8% lower than the same time last year. Summer fashion sales also helped the price of clothing and footwear to fall by 0.4% between May and June.

Those Brits basking in the glory of Wimbledon can also share in the good news – the price of equipment for sport and open-air recreation was 2.8% cheaper in June this year. Serena supporters and Murray backers will surely cheer when they hear that games, toys and hobbies also saw a 3.5% price decrease compared to June 2014.

Taking a national view, it’s a positive story with most regions having seen double digit increases in household discretionary income over the last 12 months. These ranged from the £12 increase seen in Wales to the £22 increase recorded in London:

  • While London saw a more subdued rate of discretionary income growth, thanks in part to higher essential item inflation, households experienced the largest increase in pound terms with household discretionary income reaching £22 per week.
  • Households in the West Midlands and Scotland experienced an acceleration in the rate of gross income growth in the latest quarter. This was supported by falling rates of unemployment within these regions. Over the past year, the West Midlands has seen the rate of unemployment fall by 1.5%. Household spending power in Scotland is now growing at 10.1% year-on-year.
  • The North East experienced a 2% fall in unemployment over the past year.
  • Northern Ireland once again experienced the strongest year on year growth in discretionary income of all parts of the UK. Households across Northern Ireland have particularly benefitted from the falling cost of essential items, as household spending power rose by 17.4% in the year to Q2 2015.

Commenting on the findings, Chief Customer Officer at Asda, Barry Williams, said:

“This month’s tracker brings yet more good news for households across Britain – as the summer holidays approach and the days are getting brighter the pressure on family budgets will be lighter and giving them a chance to spend more money on the things they want to do, rather than need to do.

“It’s reassuring to see that Northern Ireland continues with its accelerated recovery and that the North East continues to benefit from a fall in unemployment.”

Sam Alderson, Economist, Cebr, said:

“The continued and widespread increases in family spending power are good news for the UK economy, particularly given the global economic uncertainty surrounding China and Greece. The increase in discretionary incomes over the last year appears to have supported a further pick up in retail spending in recent months. This looks likely to continue over the second half of the year and will provide a key driver of economic growth in the UK in 2015.”

Read the full report here.