Each household on average is now £14 a week worse off than it was 12 months ago, according to a new survey.
Asda’s cost of living report found that after tax and essentials total income available has fallen by 9.6% year-on-year.
There was a 6% rise in inflation of essential goods in September, the supermarket said, while earnings growth has also been weakened by job losses.
Retailers have a huge responsibility to ensure that food and other products are available at prices that families can afford during the current economic struggle, said chief executive Andy Bond.
“Today’s figures show that there is still massive financial pressure on UK households and all retailers must put families first and continue to deliver value on petrol, food and essentials,” he said.
But he said that an “optimistic” outlook is provided by the income tracker, which contends that inflation is set to dip in 2009.
“I would like the MPC [Bank of England] to be bold and cut interest rates further to help restore consumer confidence in the run-up to Christmas,” Bold added.
Group marketing director at Asda Rick Bendel has hinted that the firm may be planning to cut back on a number of its premium ranges while the credit crunch takes its grip.
