Press Centre

Family spending power remains low as inflation outstrips earnings growth

  • 2.5 per cent year on year decrease in discretionary income of average UK household
  • £5 a week decline in family spending power compared with the same month a year ago
  • July was the seventh consecutive month of decline in the Asda income tracker
  • The cost of spending on essential goods and services eased to 4.8 per cent in July from 4.9 per cent in June.


There was a year-on-year decline in the Asda income tracker of 2.5 per cent in July 2010. This represents a £5 a week decrease in family spending power compared with the same month in 2009.

The average family had £175 per week to spend in July, down from £180 this time last year. An increase in price inflation was the single largest contributor, while annual growth in regular earnings eased over the three months to June to 1.6 per cent, from 1.8 percent in the three months to May. The cost of living continues to rise at an elevated pace. Despite easing slightly, it remained above the Bank of England’s target range at 3.1 per cent in July. The Bank of England’s August Inflation Report suggests that consumer inflation will remain close to 3.0 per cent for the remainder of 2010 and above 2.0 per cent through 2011.

Earnings growth during 2010 has been particularly weak, increasing on average by just 1.7 per cent, excluding bonuses. When bonuses are included, family spending has decreased by £4 over the year to July. Claimant count unemployment fell by 3,800 in July 2010 compared to June 2010. This was significantly below expectations of an 18,000 decrease, and below the downwardly revised decrease of 15,900 in June. Although claimant count unemployment has fallen by 12,000 since July 2009, the rate of decrease has eased substantially.

The main factors putting downward pressure on family spending power in July included food and non-alcoholic drinks, which contributed 0.4 percentage points to the overall inflation rate. The most significant factor came from fuels and lubricants as prices rose 14.3 per cent over the twelve months to July. Price inflation and transport contributed 1.3 percentage points of the 3.1 per cent overall inflation rate. With 5.2 per cent annual growth, mortgage costs have continued to edge up in July – the fourth month in a row that mortgage costs have been higher than the previous year.

The only area of spending which has helped with household’s discretionary income was clothing and footwear, which decreased 3.1 per cent over the year to July, compared to 1.4 per cent in June. While electricity, gas and other fuels were 1.9 per cent down over the year to July, other housing costs rose robustly over the same period.

Charles Davis, the economist at Cebr who compiles the report for Asda, said:

“Inflation remains elevated however, while annual growth in regular earnings eased over the three months to June to 1.6 per cent, from 1.8 per cent in the three months to May. The labour market recovery appears to be weak, with public and private sector employment sluggish.”

“While inflation slipped in July, so did growth in average earnings. The Bank of England suggests that inflation will remain close to 3.0% for the remainder of 2010 and above 2.0% trough 2011. This is going to occur within the context of a weak labour market and looming public sector job cuts. As such, the outlook for earnings growth is poor and it is unlikely to keep up with growth in the price of essential goods and services. The combined impact? Reductions in family spending power into 2011”

Andy Clarke, Asda CEO, said:

“The latest figures back up what we forecasted earlier in the week, these are increasingly uncertain times for millions of families across the UK, and our customers will need us more than ever.”

“We’re shopkeepers not economists, but in this ‘age of austerity’ we know the pennywise will thrive. Our stimulus package for the economy starts with saving our customers money every time they shop – real money that can be saved, or spent elsewhere.”

Download the full report

Posted in Press Centre on 23 August 2010
Press Centre

Asda Income Tracker reveals price of petrol is the biggest pressure on family finances in July 2010

Asda today (Tuesday 24th August) announced it was dropping the price of both unleaded and diesel by one pence per litre just in time for the bank holiday weekend.

Effective from tomorrow morning (Wednesday 25th August) drivers filling up at Asda will not pay more than 110.9p for unleaded and 113.9p for diesel at any of its 180 filling stations. The move is the latest price cut the supermarket has made over the last two weeks meaning its unleaded prices have fallen by 3p cumulatively during this time.

Earlier this week the Asda Income Tracker pointed to the price of fuel as being the biggest single pressure on family finances in July 2010. It found that despite easing significantly over the month, annual transport price inflation was still the largest contributor to overall inflation rises; there was a 14.3pc increase in the cost of fuel in July 2010 compared to the same time last year.

The retailer last week committed to holding down petrol prices until after the August bank holiday allowing drivers to fill up with peace of mind for the last big motoring get away of the summer.

Phil Briggs Asda’s Commercial Director said: “When it comes to petrol pricing we keep it simple – we try to be the first to drop and the last to put them up, wherever you live. While others are happy to hold onto higher prices for longer, and even inflate them locally where they can get away with it – we believe the right thing to do is have consistently low prices every day, everywhere”.

“This summer is no different, which is why we’ve led a concerted effort to lower the cost of living for our customers – be that cutting the price of a loaf of bread, pint of milk or litre of fuel.”

Posted in Press Centre on 24 August 2010
Press Centre
  • Latest Move Part Of Concerted Effort To Lower Price Of Commodities
  • New Research Reveals Families Could Face Lowest Disposable Income For Two Years
  • Asda Already Delivered £100m Worth Of Savings To Customers So Far This Summer


On the day that Walmart releases its second quarter sales (for fiscal 2011), Asda announced it was cutting the price of both unleaded and diesel by up to 1ppl and 2ppl respectively.

The latest move means from today drivers filling up at Asda will not pay more than 111.9p for unleaded and 114.9p for diesel at any of its 180 filling stations.

The retailer has also committed to hold down these prices for at least two weeks, allowing drivers to fill up with peace of mind until after the August bank holiday weekend, the last big motoring get away of the summer.

Since mid-July Asda has led a concerted effort to hold down the price of a number of core commodity items, investing millions in a targeted programme of every day low price rollbacks. The latest fuel price cuts follow research from the AA that shows towns without an Asda are often forced to pay up to 6p more a litre for their fuel*.

According to Asda’s highly respected monthly income tracker, millions of families are still struggling to make ends meet. The latest figures for July show family spending power is down 4.2 per cent year on year, equating to a £7 fall in disposable income each week.

In addition, new research released later today by Asda will confirm the outlook to the end of the year remains challenging.

Posted in Press Centre on 17 August 2010
Press Centre

In a bid for transparent pricing, Asda stands up for millions of UK glasses wearers and Specsavers lose court case

Today (30th July), a High Court hearing ruled that Asda had won its battle with optical giants, Specsavers to inform the millions of glasses wearers in the UK about the real spec savings they can make at Asda Opticians. The win for Asda sent out a message to all high street opticians that they have a duty to offer shoppers greater transparency and fair and clear pricing.

Posted in Press Centre on 02 August 2010
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Leading economists Cebr have forecast that UK families could face the lowest amount of disposable income for more than two years in the final quarter of 2010.

The second half of the year is expected to be an upward struggle for the average household as income growth struggles to match inflation. In a one-off, forward looking Income Tracker report, Cebr predict a modest uptick in December, but disposable income in the final month of the year is predicted to be £172 – £5 lower than December 2009 and the same level as December 2008 when the UK economy entered recession.

The report notes that a faster decline in inflation or stronger recovery in the labour market would lead to more modest year-on-year declines in spending power. Conversely, if higher inflation than we are assuming persists, interest rates rise, the labour market relapses or earnings growth weakens then steeper falls in spending power would be expected.

In addition to rising inflation, the report notes that unemployment is expected to drift up through 2010 as private sector job creation remains indecisive amid caution over the strength of a recovery.

Charles Davis, managing economist at Cebr said; “We see things as pretty tough for the consumer. We are looking at really weak real income growth, and we expect that to continue in 2011.”

Andy Clarke, Asda president and CEO said: "These are increasingly uncertain times for millions of families across the UK, and it’s clear from all the data customers will need us more than ever.

“We’re shopkeepers not economists, but in this ‘age of austerity’ we know the pennywise will thrive. Our stimulus package for the economy starts with saving our customers money every time they shop –real money that can be saved, or spent elsewhere."

Download the report

Posted in Press Centre on 17 August 2010
Press Centre

Walmart held a conference call for investors to talk through the latest Q2 results. The following comments were made:

Walmart president and CEO Mike Duke said:

  • Our international business continues to be an impressive growth engine, and Walmart International grew operating income faster than sales.


Walmart International president and CEO Doug McMillon said:

  • In the United Kingdom, Asda continues to make good progress towards their strategic goals.

  • In May, Asda announced its intent to acquire from Dansk Supermarked A/S, the Netto Food stores located in the U.K. These stores will bring many great new locations and a platform for smaller store formats throughout the United Kingdom. Of course, the acquisition is subject to regulatory approval and is expected to close later this year.
Posted in Press Centre on 17 August 2010
Press Centre

Asda sees sales of BBQ food soar despite the typical British weather

As the bank holiday arrives, weathermen are predictably saying that rain is on the way but Asda is still seeing sales of BBQ equipment rise as plucky Brits refuse to be beaten by the elements. In fact shoppers are buying more exotic foods in an attempt to recreate the food from warmer countries despite what the British ‘summer’ does. It isn’t just BBQ food that has been rising, the store has also seen an increase in items such as umbrellas and gazebos as shoppers refuse to have their long weekend spoilt and take cover.

One in five shoppers have admitted that they wouldn’t let the weather get in the way of having a BBQ as it’s part of what makes us British – our ability to not let the weather get in the way of anything such as BBQ-ing and festivals. The bank holiday looks like it will be a family affair as 52 per cent of shoppers will be having their family round for a BBQ at the weekend.

The store has seen sales of traditional BBQ food such as sausages, burger, burger buns, chicken wings, jacket potatoes and coleslaw increase over the last week. It isn’t just food that shoppers are stocking up on ahead of the weekend, the supermarket has witnessed sales of parasols increase by 14 per cent as well as gazebos by 10 per cent as people prepare to take refuge from the rain and leave Dad taking care of the cooking.

Alongside the above sales the store has sold 250,000 Moroccan lamb burgers this year as well as Moroccan cous cous increase by 53 per cent, Moroccan houmous by 32 per cent and halloumi cheese by 74 per cent. 1 in 3 shoppers is looking to try new flavours from around the world and a BBQ is the perfect place to start experimenting with new flavours and marinades.

Many male shoppers use the BBQ to show off their culinary skills and 60 per cent have said that they prefer to take control of the BBQ and let the rest of the family put their feet up. It appears many of them are perfectionist as Asda has seen sales of their thermometer fork rise by 87 per cent so every cut of meat is cooking to perfection.

Finally for those shoppers who find struggling to cook under an umbrella hard to swallow the store has seen a 47 per cent in the sales of their new BBQ shelters. Shoppers are also showing that we are currently in welly season rather than bikini season as sales of wellies have increase by 100 per cent in the last two weeks since the weather turned.

A spokesperson from Asda commented: “As the weather starts to cool down and summer comes to a close it seems our shoppers are starting to look further afield for their food as tastes become more exotic. Moroccan is really big at the moment as there are some amazing flavours as well as being healthy.”

They continued: “Brits will BBQ through anything; I’d be worried about soggy food as I’m not sure I’d like my hot dog with a side order of rain water but each to their own!”

The store has also seen an increase of 10 per cent for BBQ fuels in the last week and up 100 per cent since last year. They have also pushed a million pounds worth of charcoal in to stores to meet demand over the weekend. BBQ’s themselves are up 33 per cent.

Posted in Press Centre on 27 August 2010