Some Asda shoppers are setting £30 limits at checkouts and petrol pumps, the supermarket’s chairman has said.
Customers are putting less in their baskets, switching to budget ranges and are worried about the future, said Lord Stuart Rose.
“What we’re seeing is a massive change in behaviour,” he told media.
It comes after food and fuel costs soared in the UK. Inflation – the rate at which prices rise – reached a 40-year high of 9% in April.
Lord Rose said he saw the inflation rise coming last year like a “train coming through a tunnel with a big flashing light on the top”. Now it’s time to “fasten our seatbelts”, he said.
“People are trading back. They are worried about spending,” he said. “They’ve got a limit that they’ve set out, too. They say £30 is one limit… and if they get to more than £30 then that’s it, stop. It’s the same with petrol.”
Lord Rose said the country was facing some very tough times and urged the government to do more to help low income households.
But the Treasury said it understood people were struggling with rising prices and it was making cost of living payments of £1,200 to those on the lowest incomes.
Lord Rose also addressed government concerns that supermarkets were not passing on March’s 5p per litre cut in fuel duty, insisting Asda price changes were “done the same day”.
The retail veteran has some 50 years of industry experience under his belt. He remembers the runaway inflation of the 1970s and said this bout of rising prices has come as a very nasty surprise for consumers.
“I’m of the generation that remembers what it was like last time. And once [inflation] gets hold, it’s quite pernicious,” he said.
“And it takes a long time to eradicate… We’re in danger of being in a place that it’s very difficult to extricate ourselves from.
“What’s rather sad is that the country, the government, perhaps the Bank of England didn’t see inflation coming quickly. They’ve now recognised that.”
Asda has been tracking disposable income since the financial crisis in 2008 and is all too aware of the squeeze on consumers.
Its latest data shows households had, on average, £44 less a week in discretionary income in May compared with a year ago – a fall of nearly 18%. This is the amount of money left over after taxes and essential bills have been deducted and it is the third month in a row where disposable incomes have dropped to record levels.