According to a new report, millions of first-time shoppers flocking to budget retailers have helped boost their revenues by nearly a fifth to £4.9 billion.
The latest Nielsen retail performance data indicates that Poundland and B&M saw a 17% rise in sales in the year to July, challenging the ongoing and strong competition in the UK’s grocery sector.
In the last year alone, more than 2.2 million households bought from a value retailer for the first time, with 52% of those shopping at Poundland.
According to Nielsen, the growth was partially driven by the sales of fruit and vegetables, which have seen the biggest increase in popularity out of all the products on offer at budget stores.
Additionally, around 78% of UK households have now shopped at a budget store. This makes them more popular than discount grocers Aldi and Lidl, which are visited by 75% of households.
Mike Watkins, Nielsen's UK head of retailer insight said an increase in visitors – both first time and regulars alike – at budget stores for items that they would normally purchase at supermarkets is the main reason behind the spending growth.
He commented: "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.
"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."
Nielsen’s data also said that bargain stores "removing the £1 straitjacket" and offering more costly products also strengthened sales.
