Damn those cheap Germans. That must be the private response from Tesco, Sainsbury's, Morrisons and Asda as they continue to lose market share to Aldi and Lidl. Latest data from Kantar claims all four major supermarkets lost sales to the two Continental cheapies in the 12 weeks to 10 November compared to last year.
Can the situation be reversed, long term? %VIRTUAL-SkimlinksPromo%
Middle class love
First, some numbers. Kantar Worldpanel claims the number of shoppers nipping into Aldi has grown 16% year-on-year while Lidl sales have increased 13.8%. UK grocery inflation is currently running at 3.7% for the 12 weeks to 10 November, according to Kantar analysis. So considerable pressure on grocery spend.
A claimed third of all British households have visited Aldi in the last 12 weeks. The Aldi-Lidl numbers continued to be swelled by the middle class. Verdict Research claims 18.6% of Aldi's shoppers are now AB (or middle class) compared to 12.9% last year. Though many won't be doing a full weekly shop, many are snapping up basics, topping up later elsewhere.
Or spending more at Waitrose. "Waitrose continues to shrug off the market turmoil as it sees its share increase yet again – an unbroken trend since mid-2009," says Edward Garner, Kantar Worldpanel director.
As the UK economy eases, many households may well continue to keep their Lidl-Aldi shopping habit ticking over. Habits get entrenched and after the financial bruising of recent years, why throw cash away.
Low price lux?
Looking at the Big Four, Sainsbury's saw sales growth of 2.6% - the highest of this group - but dips just below the market average of 3.2%. In real terms, a market share loss. Morrisons year-on-year sales growth continues to be positive after the declines seen at the start of the year.
The bottom line is that Britain's four biggest supermarkets have all given away market share for the first time in 10-plus years in the last three months. There's pockets (packets?) of hope for Tesco and Sainsbury's. Tesco's premium brand Finest saw 16% growth in the year and Sainsbury's Taste the Difference is up 12%.
But Lidl and Aldi are upping their own premium offerings in the Christmas run-up: fresh lobster, vintage brandy, Serrano ham, cut-price caviar. A lot to like, as the Aldi ad goes. Let's hope the fatter marketing spend - telly commercials, even - aren't at the expense of 2014 prices.
False economies in a recession
Big four supermarkets lose ground to Aldi and Lidl
Consumers are often tempted to use appliances such as washing machines and dryers late at night when energy tariffs are typically lower. However a Fire Service representative said it was not advisable to leave a washing machine, tumble dryer or dishwasher running overnight since they are a fire risk because of their high wattage, friction and motors.
"The practice of leaving these appliances on after you have gone to bed, means if anything goes wrong, you are not in a position to do anything about it. Electrical faults have frequently caused fires that have proved fatal to those sleeping upstairs," the source said.
But it is not just fire hazards a burst hose could mean the whole downstairs of your house is flooded resulting in a hefty insurance claim and undoubtedly increased premiums as a consequence.
There is nothing wrong in itself in switching utility suppliers as if you do it properly you can reduce your bills. However if you are not careful you might actually increase your outgoings.
If you don't establish the type of tariff that best suits your needs you could be throwing money down the drain. With some suppliers, for instance, you pay less for the energy you use during the night than the energy used during the day. However, you'll need to use about 20% of your energy consumption at night to really make a saving (cheaper tariff starts at 1a.m. and finishes at 8a.m.). For those on shift work this might be very useful but for others there may be little benefit and we have already talked of the dangers of running appliances when you have gone to bed.
Fixed or capped price plans offer a set price for a period of time (usually 18 months to 2 years) but sometimes this includes a premium on the supplier's standard unit rate.
Finally, be wary of sales people who call at the door and try to talk you into switching to their company. It is just as easy to switch online yourself when you have time to make a considered and non-pressurised decision.
When stock markets go into freefall – and we have seen plenty of that over the last 12 months – there is always a tendency to try and save money by selling shares quickly or just trying to move investments to another provider. But some times all you are doing is incurring extra trading costs or charges on fund switches. Unless you are totally convinced that the only way is down, it is usually best not to sell shares when they have hit rock bottom – all you are doing then is crystallizing a loss. It makes sense to plan a less knee-jerk exit strategy.
And as far as funds go, investors have a habit of chasing the latest theme and piling in at the height of the market only to see their investments fall as sanity returns to proceedings
Glasgow-based IFA Alan Dick believes investors are getting severely short changed by active fund managers and he insists investors are far better off in low-cost Index tracker funds.
"This idea that fund managers can beat the market and pick out the winners just doesn't stand up to close scrutiny. Constantly switching fund providers only piles up extra charges and costs and offers no added value."
Anyone who has ever bought electrical goods at a major retailer will have been subjected to the hard sell of 'have you considered taking out an extended warranty?' Then follows the spiel about how you will have piece of mind if anything goes wrong blah, blah, blah….
In theory it sounds like a way of saving you hefty repair bills in the futuer but in the vast majority of cases extended warranties are overly expensive and not necessary. With most electrical goods you have a legal right under guarantee for the retailer to repair or replace faulty goods within a specified amount of time – typically 12 months. The only conceivable reason for buying an extended warranty would be for something like accidental damage cover - but in most instances that would be covered under a typical home contents insurance anyway.
Extended warranties are of course designed to cover goods for a longer period than the 12-month guarantee the product is sold with. They normally cover the three or five years, after the guarantee has run out. But you are not obliged to take out this insurance when you buy the goods nor do you have to buy the policy from the retailer selling you the item. You can pretty much bank on the fact that the in-store policy will be more expensive than any stand-alone policy as the retailer will take a commission charge. If you really feel you need an extended warranty at least shop around for it.
You might be paying lower premiums on your health insurance but that's not much good if the policy exclusions mean you are denied the treatment you suddenly find you need. Going for a policy based on budget alone rather than specific levels of cover could prove a false economy. One of the most common exclusions is home care or private nursing – you may think you are covered but the small print says otherwise. If you have to economise on personal health plans, make sure you understand exactly what you are giving up under the terms of your policy.
If you are unhappy with the response or would just like to explain a missed payment on your file you can send a Notice of Correction. This is a statement of up to 200 words that will be added to your file. Although lenders don't have to take this information into account, it at least gives you the chance to tell your side of the story.
Experian states that agencies will also help you escalate the dispute to a third party arbitrator if necessary, such as the Information Commissioner's Office.
With interest rates at record lows, it seems like a no brainer to move your savings to the best rates currently offered on the market. But moving money in this way will often only have short term benefits unless you are prepared to continue this process on a regular basis.
For instance the ING Direct Savings account is currently one of the best instant access deals on the market offering a variable rate of 2.75% for new customers including a 2.22% gross pa bonus fixed for 12 months. But after the 12 month period customers go onto the standard variable rate currently 0.5%. If you don't then move on to another provider returns on savings will come down pretty sharply.
One obvious plus with this account is that you can move your money when you like with no penalties or restrictions.
However the trade off for the decent introductory headline rate is that you have to bank entirely online or by phone there is no branch or post facility available.
There is absolutely nothing wrong with this account but the restrictions on access (no branch or post) may mean you don't use the account efficiently. And apathy to switch to another account provider after the introductory period has ended might mean your money gets little in the way of improved returns going forward. The onus is on you the saver to keep moving your money around to get the best rates.
It might seem like a way of dealing with an immediate cash flow problem but loading up on your credit card to pay your way out of recession-related problems could prove a very bad call in the longer term.
Debt counselors frequently hear cases of people paying for their mortgage on their credit card – possibly because they have lost their jobs so there is briefly no income coming into the house. It might seem like a simple solution to a short-term cash flow problem but what if the cash flow problem is not quite as short term as you imagine?
Using credit cards in this way is one sure way to rack up debts fast and accumulate interest on what you owe. If you have problems paying a mortgage or any other regular outgoings, contact your mortgage lender immediately and talk through the problem with them.