UK households’ disposable income has fallen by the most since 2008, according to grocer Asda Group Ltd., underlining the extent of the country’s cost-of-living crisis as the government steps up efforts to tackle it.
Weekly household income to spend on non-essentials dropped by £40.38 ($50.77) on average in April from a year earlier, the biggest decline since the UK’s third-largest supermarket operator started publishing a tracker on the data. It has fallen to £205 a week, the lowest since October 2018.
Chancellor of the Exchequer Rishi Sunak on Thursday announced plans to provide grants of £650 to more than 8 million of the poorest households, financed via a tax on energy firms’ windfall profits.
Asda, considered to be the most value-focused of Britain’s “big four” grocers, said it has spent more than £90 million expanding its range of budget-friendly items dubbed Just Essentials and is reducing and locking the price of more than 100 products for the rest of the year. The data for Asda’s income tracker are gathered by the Centre for Economics and Business Research.
Brothers Mohsin and Zuber Issa acquired a majority stake in Asda with buyout firm TDR Capital last year in a £6.8 billion transaction. The highest inflation in 40 years is forcing the new owners to remain competitive at a time when larger rivals Tesco Plc and J Sainsbury Plc are price-matching with German discounter Aldi.
Asda said revenue slid 9% to £4.6 billion in the first three months of the year as customers eat out more after the easing of Covid restrictions.