Grocery shoppers
Consumer spending on supermarkets' own-label products far outpaced spending on branded products Reuters

British shoppers are increasingly turning to own-brand groceries to cut down on their expenses amid rising inflation, a new report has suggested.

Figures released by Nielsen revealed that consumer spending on supermarkets' own-label products increased 5.5% compared to a year earlier in the 12 weeks to 9 September.

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That far outpaced spending on branded products, which was up 1.2%. Spending across all grocery products rose 3.5%.

"The return of inflation means shoppers are increasingly turning to supermarkets' own-label products to help manage their weekly grocery spend," said Mike Watkins, head of retailer and business insight at Nielsen.

The UK inflation rate climbed to its joint-highest level in more than five years in August to 2.9% from 2.6% in July.

Watkins added that supermarkets were still reluctant to pass on higher costs to consumers amid a "very competitive" retail environment.

"Looking at what shoppers are putting into their baskets suggests food retailers are helping shoppers manage the impact of inflation by offering different ranges of own-label alongside brands across many categories," he said.

In the 12 weeks to 9 September, Tesco saw the biggest rise in sales among the so-called "big four" supermarkets at 2.8%, followed by Morrisons at 1.7%, Sainsbury at 1.4% and Asda at 1%.

German discount chains Aldi and Lidl saw sales jump 13.6% and 18.7%, respectively.

Watkins said the big four supermarkets would continue to experience positive sales through the rest of the year due to higher prices.

But he warned that "the big supermarkets will need to keep on their toes," because nearly two-thirds of households were visiting a discounter at least once every three months.

"Consequently, the three main challenges are: to grow spend per visit faster; to encourage frequency of visit for different shopping missions and; to have inspiring media campaigns that help build loyalty through to the end of the year and the all-important Christmas shop," Watkins said.