New data has found that two-thirds of customers are limiting their monthly food budgets as inflation sails to levels not seen in 40 years
With inflation surging and discretionary income falling, 63.4% of households are setting strict limits on food shopping as a result of rising living costs, according to the most recent Retail Economics-HyperJar Cost of Living Tracker.
With nearly 90% of households looking to cut back on discretionary spending, 74.1% of customers plan on reducing their spending on takeaways. Eating out is also set to take a hit, with more than 70% of people planning on cutting back spending in this area, which could see an increase in grocery spending.
It comes as the tracker found that the average household saw a 12.1% decrease in discretionary spending power in June compared with the same month last year - leaving £135 less to spend on non-essential items.
Across the economy, this is likely to have wiped out around £3.9bn of cash available for discretionary purchases throughout the month.
Essential costs continue to skyrocket, with the least affluent households already experiencing double-digit rises in inflation of 12.1% - higher than the official 9.4% rate.
After paying for essentials such as food and fuel, the least affluent households saw their spare cash fall by 15.6% in June compared with the same month last year. This is the equivalent of £77 per month less cash available to spend on non-essential items.
As the Conservative Party leadership contest drags on, the Cost of Living Tracker found that most people believe that any proposed tax cuts would likely be swallowed up straight away by rising food and utility costs.
Around one in 12 households (8.0%) would put any tax cut into savings, while 8.2% would feel more compelled to spend more on non-essentials.
Richard Lim, CEO of Retail Economics, says: “The type of inflation we’re currently seeing is disproportionately impacting the most economically vulnerable. But conditions have worsened for average households too. The amount of spare cash families have after paying for essentials continues to decline at double-digit rates, leading to difficult choices that are having a real impact on retailers as consumers look to cut and limit spending where they can.
“The challenge for the next Conservative leader is implementing policies that will have a significant impact on consumer sentiment. Around two-thirds of households believe that potential tax cuts would be swallowed up straight away by rising food and utility costs.”