Lord Stuart Rose, who became chairman of the chain last year, told of the “massive change in behaviour” of customers, who are generally putting less in their baskets and switching to budget ranges. Inflation – the rate at which prices rise – reached a 40-year high of nine per cent in April.
Lord Rose, 73, said today: “What we’re seeing is a massive change in behaviour.”
“People are trading back. They are worried about spending.
“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.”
Speaking to BBC, the entrepreneur said he’s noticed customers are now worried about the future.
Food and fuel costs have soared in the UK recently. A decline in real wages could see a family of four increasing their spend on food and groceries from £396 per month to £439 per month, according to a recent hard-hitting report by the Institute of Grocery Distribution (IGD).
The Asda boss, who said he saw the inflation rise coming last year like a “train coming through a tunnel with a big flashing light on the top”, has urged the government to do more to help low income households.
Recalling the runaway inflation of the 1970s, the retail veteran added: “Once it (inflation) gets hold, it’s quite pernicious.
“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.”
A government spokesperson told BBC its £37 billion support package meant it would deliver a tax cut in July to save the typical employee more than £330 a year.
It said people on Universal Credit would keep £1,000 more of what they earn and a 5p cut on fuel duty would save a typical family £100.