The figures are revealed in Asda’s latest Income Tracker report (June 2022) which is independently compiled by Cebr.

The 32.3% drop is the largest contraction in spending power of any region across the UK, and the biggest drop in the history of the Income Tracker.

The latest NI figures reflect the overall UK trend, with household disposable incomes falling for the eighth consecutive month, by 18% in June, compared to the same period last year. Soaring living costs, up 11% year-on-year in June, meant that UK families were on average £43.95 a week or £188.34 per month worse off compared to June 2021.

As the UK’s worst performing region, it means the average family in NI has only £93.50 per week at its disposal once all taxes, essential items and bills have been paid – – £33.50 less than in Q1 2022.

The record falls in household spending power are being driven by income growth falling well short of spiralling inflation.

Northern Ireland is also disproportionately affected by having a high share of public sector workers, where wage growth has lagged in recent months, as well as a larger share of social security claimants, meaning the withdrawal of the Universal Credit uplift has had a significant impact.

When it comes to comparing spending power, the North East is the closest region to NI at £123 per week in Q2, contrasting sharply with Wales at £164 and Scotland at £205, while families living in London have £249.88 per week at their disposal – the first time discretionary income has fallen below £250 in London since the fourth quarter of 2018.

On a UK-wide level, the cost-of-living crisis hits particularly hard for low-income families with all of the bottom 20% of UK households having ‘negative disposable income’ – resulting in a shortfall of £60 per week in June between what they earned and what they needed to spend on essentials such as mortgage, rent, utility bills and transport costs. Increasingly, those in the bottom 40% of households are also seeing negative discretionary income.

Asda said it continues to deliver a range of measures to support customers and colleagues with the cost-of-living crisis, including the launch of a new ‘Essential Living Hub’, an online space where customers can access a broad range of hints, tips and hacks which go beyond the weekly food shop, covering how to save energy, budget better, buy and cook smarter, entertain the kids for free and even eat out without paying a penny.

For those visiting stores, Asda has also extended its £1 kids’ café meals, with no minimum adult spend, until the end of the year and ‘dropped and locked’ the price of over 100 family favourites until the end of the year. On average, prices will reduce by 12%.

Commenting on the latest report and the longer-term outlook for Northern Ireland, Sam Miley, Senior Economist at Cebr said: “The latest Income Tracker report shows stark results for Northern Ireland, with the average household in the country witnessing discretionary income of just £93.50 per week in Q2.

“The impact of the cost-of-living crisis is clear, with rising prices eating into incomes and reducing families’ ability to spend. Indeed, Q2 marked the first time in five years that Northern Irish households have had less than £100 per week to spend on non-essential items. The worst could be yet to come, as an even more severe inflationary spike, driven by food and transport prices, is forecasted for Q4. This would put further downward pressure on spending power.”

The full report can be viewed here: https://corporate.asda.com/media-library/document/asda-income-tracker-july-2022/_proxyDocument?id=00000182-34a3-d424-a1fa-7ee36f4b0000

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With footfall decreasing by two per cent year-on-year in October, retailers may need to brace themselves for a disappointing turnover this season.

The decline in shop visits mark out this October as the worst in four years, and the biggest fall since June 2016. Statistics from the British Retail Consortium also shows online sales have also moderated 2.2 per cent year-on-year.

Over the three months to October, store sales of non-food items fell by 2.9 per cent on a like-for-like basis. However a 2.4 per cent increase in food sales over the same period indicates shoppers are saving their money for essential items.

Mark Antipof, chief commercial officer at Visa, said: “Retailers will now be pinning their hopes on strong performance around Black Friday and Cyber Monday. November’s data will therefore provide the first real clue on how Christmas is shaping up.”

Sterling devaluation continues to be marked out as a factor in reduced spending. As the pound remains around 14 per cent weaker against the US dollar than it was two years ago, economists are continuing to observe reduced consumption as inflation skyrockets.

With the Christmas marketing well under way, retailers will be hoping for a surge in spending on Black Friday and Christmas week. However as inflation and interest rates continues to grow, the outlook remains uncertain.

Richard Lim, chief executive of Retail Economics said: “The squeeze on personal finances is expected to be at its most intense leading up to Christmas, which does not bode well for retailers.

“The persistent erosion of spending power over the last few months has begun to take its toll and shoppers are tightening their belts.”

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