Recent data shows a continuing trend towards conservative spending and lower family budgets, as the average family in the UK has almost £15 less to spend each week than just one year ago.
According to reports from supermarket chain Asda, high inflation and sluggish wage growth is causing families to be even more conservative than they were during the recent recession.Asda’s ‘income tracker’ statistics are released on a monthly basis, and recently showed that the average UK family’s weekly spending budget fell by almost 8% in August alone (the steepest decline since the company began keeping records in January 2007).
Given the fact that consumer spending accounts for almost 70% of the gross domestic product sold in the UK, such statistics are indicative of the true economic problems the nation is currently facing. Similar data released by CBI business lobby also showed that high street sales are much weaker than they were just one year ago, although there was not a significant change between September and August. While some believe that high street sales are beginning to stabilise, the same cannot be said for retailers selling tangible goods and household items like furniture or apparel.
Recent surveys show that 39% of retailers believe that their sales are worse than a year ago, while only 24% believe they are better. Conversely, 23% of wholesalers reported a decline in sales, while 36% reported a rise in sales volume. The statistic “three-month moving average” is used to measure spending trends over time, and is currently at its weakest point since summer 2009. Fortunately, there are indicators that retailers may begin reducing their profit margins in order to pursue larger sales volumes, and if this holds to be true it could ease some of the inflationary pressures that are causing consumer spending to remain so conservative.
