As the cost of groceries skyrockets, households are looking to cut costs wherever they can. Annual shopping bills are set to rise by £380 this year – a rise that millions of households will struggle to absorb.
Discounters – like Poundland, Poundstretcher, B&M, Home Bargains, Iceland, OneBelow, Savers, Aldi and Lidl – made a name for themselves during the 2008 financial crisis by offering shoppers everyday items at rock bottom prices. competition. So are they coming to the rescue of buyers this time around?
Last week, The Mail on Sunday visited major discounters across the country and compared the prices of a range of everyday branded goods in each store with those of Britain’s most popular supermarket, Tesco. We analyzed the prices of 70 popular food, toiletries and household items from nine discount stores in London and Essex.
Don’t crack up: As prices soar, households are looking to cut costs wherever they can
We only compare the prices of brand name items, such as Walkers, McVitie’s and Nivea, so we compare like for like. But it’s worth noting that prices for lesser-known, own-brand items can be even cheaper. Aldi and Lidl notably offer the best deals on their own-brand products.
Comparing prices can really only be done by visiting individual stores as we did last week: many discount retailers, including Poundland, Poundstretcher and B&M, have limited websites. Where pack sizes differed between retailers, we compared prices by weight.
What we found was a mixed bag. While the shelves were tagged with what looked like big savings, in some cases the prices were the same as at Tesco. In three cases, Tesco offered the best price we could find, and no store was consistently cheaper than Tesco. For example, a 630g jar of Nutella was offered for an impressive £4 at Poundland. But the same pot can be found at Tesco for £3.65 (thanks to an Aldi price match). In fact, we’ve found Tesco’s Aldi Price Match Promise to keep prices low on a number of products, including Tetley Tea, Pringles and Warburtons crumpets.
Likewise, a pack of Honey Lemon Strepsils for £1 might sound like a bargain at Home Bargains. But its packs contain just eight lozenges, while Tesco charges £3.25 for 36, or 72p for eight.
No discount retailer was consistently cheaper than the others – even Aldi and Lidl weren’t always the best value. For example, Heinz ketchup was cheaper by weight at Iceland, Poundland and B&M.
But overall, savvy shoppers can make big savings on their purchases by buying everyday items from discount stores – if they don’t assume they’ll always offer the best value for money. . For example, a large packet of Cathedral City extra-mature cheddar costs £5.25 at Tesco – but just £3.69 at Home Bargains.
A pack of five Zesty Cheese Doritos costs £1.65 at Tesco, but £1.25 at OneBelow, while a 500ml bottle of Coca-Cola costs £1.65 at Tesco and £1.39 at B&M . These savings can be pennies, but over a year it can be a decent reduction. One thing that stood out when I visited discount stores was that they had amazing deals on unique items. For example, at Poundshop there were flip flops and reading glasses for £1. When I went to B&M there were solid wood garden benches for £60, which you would be hard pressed to buy anywhere else for less than £100.
Will discounters keep their prices low?
Grocery prices are rising across the board – soaring food prices are a major driver of inflation, which hit 9.1% last month. However, discount stores should rise to the challenge and offer some of the cheapest high street prices.
Richard Hyman is a partner at retail consulting firm TPC. He says, “When you pin your colors on a flagpole, like low prices, you have to keep the promise or the rug will soon be pulled from under your feet.
“If you say our prices are better than others on the high street, that’s what shoppers should find when they visit your stores.”
Hyman adds that there’s particular pressure on discounters to deliver because they specialize in what the retail industry calls “known value items.”
These are products, such as toiletries and cabinet staples, that households tend to replace and restock so frequently that they have a pretty good idea of how much they cost.
Customers know whether or not they are getting good prices, so discounters have to offer the cheapest prices to attract them.
Discounters could really take off during holidays, such as Christmas, predicts Nisa Bayindir, a consumer psychologist and behavioral scientist.
She says: “In difficult times, people adapt to living frugally from day to day. But on special occasions, we often seek to buy and do things like we did in easier times to give us a sense of normalcy and a more even keel.
She adds: “So if we’re in the middle of a recession over Christmas, I would expect shoppers to be looking to buy some treats, but at the lowest price they can find.”
“Discounters should benefit from this environment.”
Can you rely on cheap stores for core items?
Clare Bailey is a retail expert and the author of The Retail Champion – Ten Steps To Retail Success. She says, “Discounters will often buy a limited amount of stock from a source that needs to liquidate it.
“Items purchased from these stores may have a shorter shelf life than from a traditional supermarket. But if you buy a pack of cookies, they’re unlikely to hang around the average family home for very long anyway.
She adds: “It is not possible for discount stores to sell full ranges online. The selection changes so quickly that it would not be viable.
“Even in-store, ranges change from week to week, so shoppers can’t count on being able to buy a certain item at a time.”
Who are they targeting in the cost of living crisis?
Bailey believes that during the 2008 financial crisis, when discounters rose to prominence, they targeted low-income people who needed to make every penny count. Today, the situation is quite different – even people who are perfectly capable of paying full price use discount retailers to find bargains when shopping.
“As consumers, we have a very different attitude today,” she says.
“It’s like reverse snobbery, where it’s now cool to be thrifty and good to not be considered wasteful – environmentally but equally with money.”
Bayindir adds, “I think the stigma goes from being frugal to being taken for a fool. People are proud to point out the deals and bargains they find.
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