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Sales Boost As Millions Flock To Bargain Stores Like Poundland For First Time

Bargain stores have boosted their sales by nearly a fifth to £4.9bn as millions of first-time shoppers head to their shops, new research shows.

Bargain shops like Poundland and B&M saw a 17% rise in sales in the past year to July, Nielsen (EUREX: 11400372.EX - news) retail performance research showed.

The spending growth was mainly driven by an increase in the number of first-time visitors, and by more customers choosing to buy goods from budget stores rather than at supermarkets.

More than 2.2 million people shopped at bargain stores for the first time in the year to July, with 52% of those buying goods from Poundland.

The rise in sales is in part due to stores "removing the £1 straitjacket", allowing them to offer more expensive products.

The introduction of fresh products including fruit and vegetables was also partly responsible for the growth, representing the biggest rise in popularity of all the goods on offer and underscoring the intense competition in the UK grocery sector.

"This is similar to what we saw some years ago with Aldi and Lidl, who initially attracted shoppers with special buys for non-food items and low prices on groceries," said Mike Watkins, Nielsen's UK head of retailer and business insight.

"People are starting to visit for their regular grocery staples and more experienced bargain store shoppers are becoming interested in adding fresh produce to their repertoire," he added.

Around 78% of British households are choosing to shop at a budget store, making them more popular than German discounters Aldi and Lidl and an increasing threat to the 'Big Four' supermarkets (Other OTC: UBGXF - news) .