DISCRETIONARY income rose for the 13th consecutive month in November as families had an extra £14 to spend on non-essential items.
However Asda’s latest income tracker showed that the £14 spending boost, which gave families an additional £193 a month to spend on what they like rather than what they need, fell short of the £17 average seen during the rest of 2015.
Asda said this was due to a slight increase in inflation that is expected to continue into the New Year.
The Leeds-based supermarket chain warned that the New Year’s bang could turn into more of a “fizzle” as growth in British spending power slows down.
“Families are set for a festive hangover despite double digit increase in disposable income for thirteenth consecutive month,” said the latest income tracker.
Between January and September consumers spent £861bn – up from £835bn for the first three quarters of 2014.
The report showed that consumers are spending less on stocking their cupboards and many opted to treat themselves to big-ticket items.
The number of people who bought new cars increased significantly, rising 11.5 per cent compared with the first three quarters of 2014. Jewellery and watch purchases also proved popular, increasing 9.1 per cent on last year.
The report also recorded a 6.6 per cent increase on furniture spending since 2014. Gardens also benefited from the seeds of recovery, with an 8.7 per cent year on year rise in spending on gardens, plants and flowers.
Consumers didn’t limit their spending to material goods. The income tracker showed that people devoted more of their budget to dining out at restaurants and cafes in 2015, with dining out spending rising 2.1 per cent.
Buoyed further by the 13 per cent fall in vehicle fuel costs, recreational and cultural activities also enjoyed a boost of 8.3 per cent, with recent pantomime and party outings likely to contribute to strong growth over the year.
Asda‘s president and CEO, Andy Clarke, said: “The good news for customers is that pressure on household budgets has clearly eased in the run up to Christmas as a direct consequence of decreases in the cost of food, fuel and energy prices.”
He said spending has shifted from food and drink to leisure and festive fun.