Tesco, Sainsbury's and Aldi shoppers make big change to slash grocery bills

The Tesco logo is displayed outside a branch of the supermarket
-Credit:Getty


Brits are increasingly turning to supermarket own-brand products in an effort to keep their food bills manageable, with these items flying off the shelves at a record rate. According to new data from Kantar, own-brand products now account for 52.3% of all sales – a historic high – as shoppers seek better value amidst the cost-of-living crisis.

Not only are own-label goods on the rise, but supermarkets have also increased discounts, with January witnessing a £274 million surge in promotional spending, the highest level since 2021. Fraser McKevitt, retail expert at Kantar, commented: "Supermarkets were dishing out the discounts this New Year, and consumers responded."

He added that "Spending on promotions rose year-on-year by £274 million, accounting for 27.2% of sales – the highest level in January since 2021. People also turned to non-branded products to help keep costs down, with own label as a proportion of sales hitting a record high of 52.3% in January. Spending on supermarkets’ own lines was up 5.4%, helped by consumers buying premium own label products in the couple of days leading up to New Year’s Eve."

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A shopping trolley outside a Sainsbury's supermarket
Brits are increasingly turning to supermarket own-brand products in an effort to keep their food bills manageable -Credit:Getty

This shift towards own-label products is set to boost profits for supermarket giants who make much more on these items than on big brands. Tesco is projected to increase profits to over £2.9 billion for the current fiscal year, with Sainsbury's expecting to make more than £1billion. Despite this, major supermarkets have recently announced thousands of job cuts and warned of price increases due to tax hikes.

In a welcome move for households feeling the financial squeeze, grocery price inflation has dipped from 3.7% to 3.3%, hinting at some respite for the budget-conscious consumers. Kantar's latest data shows a decrease in the cost of ambient cooking sauces, household paper goods, and cat food, with prices, however, creeping up for chocolates, chilled smoothies and juices, and butters and spreads.

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The focus on savings is evident as shoppers continue to keep an eye out for deals while making more health-conscious selections. January saw over £1.2 billion spent on fresh fruit and veg—a significant increase of £193 million compared to December—as individuals embarked on health-conscious new year aspirations.

Nathan Ward, a consumer specialist at Kantar, noted the shift towards healthier options: "Over a quarter of food and drink purchases in January were made with health in mind."

Reflecting changing lifestyle choices, sales of low-alcohol and alcohol-free beverages have witnessed a 7% rise post-festivities—indicating a trend among Britons opting to reduce their alcohol intake.

Supermarkets are locked in a fierce competitive tussle, with Lidl achieving its third consecutive year of growth, boasting a 7.4% uplift in sales and grasping a 7.2% share of the market. Aldi also bolstered its position, witnessing a 4.2% surge and claiming 10.2% market share.

Dominating the sector, Tesco sustains its lead with 28.5% of total sales—its highest since April 2024. Meanwhile, Ocado emerges as the top performer, benefiting from its collaboration with Marks & Spencer and capitalising on the online shopping boom with an impressive 11.3% growth.