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Rising inflation pushes shoppers towards to discount supermarkets

People are choosing cheaper stores and cheaper products with growth at discounters such as Aldi and Lidl outstripping bigger rivals

Sales at Britain’s grocers are lagging behind price inflation as shoppers switch to cheaper stores and goods, Kantar Worldpanel said.

The market research company said on Tuesday that grocery sales rose 3.8% year-on-year in the 12 weeks to 7 August, lower than the 5.2% grocery price inflation during the period.

“It is evident that shoppers are trying to manage their ‘personal’ inflation by trading down. This can be done by seeking out lower priced outlets and cheaper alternative products,” Kantar said.

That resulted in another good performance from budget chains Aldi and Lidl with Aldi seeing sales up 24.4% and achieving an all-time record market share of 3.6%.

“It’s unsurprising that the discounters have pushed further ahead,” Kantar said.

Britain’s grocery market remains polarised, with hard discounters Aldi and Lidl and upmarket chain Waitrose growing much faster than mainstream rivals Tesco, Asda and Sainsbury’s.

Among Britain’s top four grocers, only Morrisons increased its market share during the period.

Many retailers have been struggling as shoppers’ disposable incomes are squeezed by rising prices, subdued wages growth and government austerity measures.

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