Asda income tracker reports ninth consecutive month of decline, with average UK household £4 a week worse off compared with last year.
The latest tracker revealed a 2,1% drop in UK household discretionary income last month compared with September 2009, as household net income struggled to keep pace with rising prices.

The average family had £177 per week to spend in September, down from £181 for the same period last year. Average weekly earnings growth picked up slightly in August but was outstripped by annual consumer price inflation, which remained unchanged at 3.1% last month - above the Bank of England's 2% central target.

It is expected that the VAT rise to 20% in January will further squeeze household spending power over the coming months and Asda president and ceo Andy Clarke warns of a tough Christmas.

He said: "The ninth consecutive month of decline in family spending power is significant and adds further weight to what our customs have already been telling us - it's going to be a challenging Christmas for everyone. In fact, shoppers are already stocking up on toys and big tins of chocolates in a bid to spread the cost of the festive period. "

Despite this, recent research suggest that consumers look set to spend an extra £1.6bn this Christmas, boosting sales 1.9% to £85.2bn. However, analysts say it is the online channel that is set to benefit the most, accounting for more than three quarters of the extra spending with growth of £1.2bn on last year.

Verdict's lead retail analyst Maureen Hinton urged high street retailers to get online, explaining that the "switch to online does mean those retailers without transactional websites are missing out at a crucial period for the sector."