Supermarket giant Asda has raised fears over Christmas spending after its research found households are in the red to the tune of £69.
The supermarket pointed to rising inflation driven by spiralling energy costs as a reason for households having much less to spend on their Christmas shopping and their big festive food shop this December.
Asda’s Income Tracker, which measures household disposable income, fell for only the second time this year, decreasing by £1.98 in October, leaving the average UK household with £247 per week.
Asda said the 2.3 % rise in inflation was driven primarily by high energy prices sparked by the rise in Ofgem’s price cap at the start of the month, resulting in more expensive energy bill costs.
CEBR, who produce the tracker on behalf of Asda, has said that high inflation will result in households having “dampened spending power over the festive period”, particularly those on lower incomes.
Low income households saw the slowest growth in disposable income since January this year at just 1.6 %, according to Asda’s tracker, meaning their net income doesn’t cover the cost of bills and essential spending, leaving them with an average weekly shortfall of £69.
Across age groups, those aged 30 to 49 saw the fastest annual rise in the cost of essential spending, which increased by 3.8 % to £765 in October. But these households, often made up of younger families with children, face significant essential expenses, including childcare costs.
The rise in essential spending also saw these households record the weakest growth of any age group, with their disposable income only increasing at 5.5 % to £298 per week in October – their weakest growth since January.
Sam Miley, Managing Economist and Forecasting Lead at CEBR, said: “October’s reading was only the second time this year that the Income Tracker reading has fallen on the month.
“This was largely expected, given the increase in the Ofgem price cap that took place at the start of the month, bringing higher energy bills. These increased energy prices will persist over the rest of Q4, leading to slightly dampened spending power over the festive period.”
To help families feeling the financial strain this Christmas, Asda has brought back its £1 ‘winter warmer’ meal deal in to help support the over 60s during the colder months.
From now until the end of February, eligible customers can enjoy tomato, chicken or vegetable soup, a roll and unlimited tea and coffees for a mere £1 in any of Asda’s 205 cafes.
