Asda has predicted disposable income will actually rise in 2009, on the back of forecasts by the Centre for Economics and Business Research predicting inflation will fall below zero in the summer.
Asda’s income tracker has forecast that consumers will become better off as factors including the VAT cut, falling inflation and fierce retail competition culminate to give consumers an average £7 more in their pockets in August and September compared with this year.
Despite the weakening pound outweighing the effect of falling worldwide commodity prices, the UK consumer price index is expected to fall nearly 10% in the first half of the year. However, this improvement in people’s finances was not likely to translate into greater spending, Asda claimed, as consumers would embrace saving and reject flippant and indulgent purchases.
The latest Pulse of the Nation survey, in which Asda asked more than 2,000 shoppers about their spending habits, showed 67% would save the majority of any increased income.
“Customers now have a saving mentality,” said Asda marketing strategy manager Jon Owen. The survey also found 70% of Asda customers were freezing more food to avoid waste and 30% were doing laundry less frequently. “The era of conspicuous consumption is over,” said Asda CEO Andy Bond.
Asda’s income tracker has forecast that consumers will become better off as factors including the VAT cut, falling inflation and fierce retail competition culminate to give consumers an average £7 more in their pockets in August and September compared with this year.
Despite the weakening pound outweighing the effect of falling worldwide commodity prices, the UK consumer price index is expected to fall nearly 10% in the first half of the year. However, this improvement in people’s finances was not likely to translate into greater spending, Asda claimed, as consumers would embrace saving and reject flippant and indulgent purchases.
The latest Pulse of the Nation survey, in which Asda asked more than 2,000 shoppers about their spending habits, showed 67% would save the majority of any increased income.
“Customers now have a saving mentality,” said Asda marketing strategy manager Jon Owen. The survey also found 70% of Asda customers were freezing more food to avoid waste and 30% were doing laundry less frequently. “The era of conspicuous consumption is over,” said Asda CEO Andy Bond.
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