Despite supermarkets saying they are cutting prices, inflation has reached its highest level in over a decade, according to fresh industry data, while overall grocery sales are down.
Inflation at supermarkets reached 5.9% in March, research from Kantar on Tuesday showed, up from 4.3% in February and the highest since December 2011.
The average household will now be exposed to a potential price increase of £271 per year, said Kantar's head of retail and consumer insight, Fraser McKevitt.
Big grocery groups have trotted out the line that they will 'keep prices low despite inflation' or reduce prices on essential items.
The latest were Asda and Morrisons this week saying they are cutting prices, with Tesco PLC (LSE:TSCO) saying in its results last month that it was “laser-focused on keeping the cost of the weekly shop in check”.
In reality, this has only seen the level of products on promotion that were bought decrease to 27.3% from 30%, Kantar's research has found, which McKevitt said was because the 'everyday low price' strategies were starting to come to the fore.
Amid a search for value from households, limited-assortment discounter Aldi was the fastest-growing retailer in the period, with sales increased 4.2%, followed closely by fellow LAD Lidl, where sales were up 4.0%.
More than 1mln extra shoppers visited the German-owned pair over the past 12 weeks compared with last year.
"Both retailers achieved record-breaking market shares, with Aldi now holding 8.8% while Lidl stands at 6.6%," said McKevitt. "Collectively, the two discounters account for 15.4% of the market – up from just 5.5% a decade ago.”