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British shoppers head to Aldi and Lidl amid falling cost of living | Supermarkets

UK shoppers are choosing to shop more at discount supermarkets as food price inflation hits its highest level in a decade amid a growing living crisis.

Aldi took the largest share of the grocery market and Lidl reached its previous peak as food price inflation reached 5.2% in March, the highest level since April 2012, according to the latest data from analysts Kantar.

Lidl confirmed its position as the UK’s sixth largest supermarket chain ahead of the Co-op with a 6.4% market share, while Aldi reached 8.6%, 1% less than Morrisons, the UK’s fourth largest chain.

Kantar said prices for pet food and gourmet foods such as crisps were rising the fastest, but some products such as fresh bacon were still falling.

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Food price inflation, driven by higher prices for staples such as wheat and oil, as well as energy and packaging, is forcing shoppers to change their habits as price increases filter through to supermarket shelves. With core consumer price inflation at 6.2% – the highest level in three decades – families on tight budgets are looking for ways to save on basic necessities.

Shoppers are increasingly turning to supermarket private label goods rather than well-known brands, with more than half of spending on such goods – 50.6% – compared to half a year ago.

From-scratch cooking, popular during the Covid lockdown, saw flour sales up 28% in March 2019, and dry pasta sales up 17% over pre-pandemic levels.

Fraser McKevitt, head of retail and consumer insights at Kantar, said: “We will increasingly see consumers and retailers act to manage the rising cost of their grocery baskets.”

Aldi and Lidl were the only major chains to increase sales in the 12 weeks to March 20, recovering from a slump in the first phase of the pandemic when demand for home deliveries was high and interest in neighborhood shopping was low.

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Morrisons and Asda have been hit hard by changing habits, likely to lose out as budget shoppers turn to discounters, while Tesco was the best of the big chains, but sales were still down 5.2% in three months.

Total spending at supermarkets fell 6.3% year-on-year in the 12 weeks to March 20, as a return to the office and the reopening of cafes, restaurants and bars dampened demand for home cooking.

The biggest losers were independent retailers, whose sales fell 13.4% as shoppers returned to bigger stores after shopping locally during the lockdown.