'Glimmer of hope' for next year
It said the average UK household had £158 a week of discretionary income in October, unchanged on the same month the year before. It is the first time since June that this figure has not fallen year-on-year.
The Asda Income Tracker figure should provide a degree of hope for retailers, under pressure to deliver a bumper Christmas performance after a summer sales splurge was followed by a subdued autumn.
It comes as department store John Lewis prompted hopes that shoppers were starting to return to spending as it notched up weekly sales of more than £100 million for the first time this year.
However, incomes were squeezed by low wage growth, with latest official figures showing average regular pay up just 0.8%., while rising energy costs are also putting budgets under strain.
Asda chief executive Andy Clarke, said the fall in essential item inflation and stabilising of spending power would bring a welcome respite for customers.
But they still faced a challenging Christmas as improvements in the wider economy took time to filter through to regions hardest hit by the economic downturn, he added.
"There is a glimmer of hope that we're on the right track for 2014. But without a substantial improvement in income growth the journey to recovery will be slow."
A Treasury spokesman said: "This Asda survey is the latest sign that Britain's hard work is paying off and the country is on the path to prosperity. But times remain tough for many people."
© 2013 Press Association