>>Consumers are spending less than ever on groceries


Government statistics rarely make for a right riveting read, but I have to admit that the summary of the Family Spending 2005 report put out by the Office for National Statistics had me hooked.
For starters, I think the ONS figures again highlight the biggest challenge facing this industry, namely the fact that spending on grocery items is accounting for an ever smaller share of average weekly household expenditure. By my reckoning, food and drink, alcohol and tobacco now represents something like 13% of household spending. That’s a good percentage point less than a couple of years ago and way off the 33% of disposable income that used to be spent on food alone in the 1950s.
Now, I realise that average disposable incomes are rising - our weekly expenditure grew by just under 4% year-on-year, for instance - but do some quick number-crunching and you will see that consumers are spending less in cash terms on key grocery lines than even a year ago (about £1.50 a week less, in fact). So where’s the nation’s money going? Well, no surprises here. More and more is being spent on fun stuff such as the cinema, satellite TV, restaurants, holidays and the like.
Interestingly, the ONS says we are today spending as much on mobile phones and other communication paraphernalia as we are on fags and booze. Which is kind of ironic when you consider the health risks associated with all of those products (binge texting really is bad for you, I’m afraid). The other fascinating nugget of info in the ONS data covers our spending on meat, fruit and veg, which accounts for 36% of our weekly expenditure on food and non-alcoholic drinks, while confectionery and chocolate represents just 4%. Which makes you wonder why everybody is so worried that we are a nation of fatties who binge on choc bars.
Scary stuff in the stats