ASDA said the North-South divide is getting a lot worse as London and the South-East feels the benefit of the recovery while the North continues to suffer.
Chief executive Andy Clarke said that the effect of the economic recovery is hugely dependent on what part of the country people live in.
“London and the South-East feels very different from the North-East and North-West where unemployment is still a big challenge,” he said.
“Consumers are very cautious about spending in these areas. People in more challenging areas of the UK would still say how tough life is.
“If you’re in London and the South-East you may feel distinctly happier than in the rest of the UK. Costs are rising on household income and household expenses and on businesses.”
Leeds-based Asda’s latest income tracker for January shows that while the average UK household had £160 a week left over for spending on non-essentials, Londoners had £235 a week and those in Northern Ireland had just £57 a week.
People in Yorkshire and the Humber had £127 a week left over, making it one of the hardest hit areas of the UK.
Mr Clarke was speaking yesterday as Asda announced its latest trading figures, which showed flat sales over the key Christmas quarter. The group said 2013 was a “tough year” as it slashed prices to keep pace with discounters Aldi and Lidl.