Our survey finds that canny customers can cut their bills by up to 66%.

It might serve only to reinforce a national stereotype, but hard-pressed Scots are taking advantage of the rapidly-expanding discount retail culture to cut their food shopping bills.

Greater value for money is the new watchword at supermarkets and on the High Street as shoppers eke out the family budget.

Experts say the effect of the change is twofold:  supermarkets have been introducing a growing number of “cheapest” products, reducing bills and trying to keep their market share of what is still a very lucrative sector, while pound stores are mushrooming across Scotland as part of a UK trend which has seen them overtake the total number of bookshops.

In supermarkets, the effect is stark – a HeraldScotland survey of the cost of 10 basic items in four of the main chains shows that the price variation is huge, with savings of around £13-14 or 66% if customers opt for the lowest-priced alternatives.

* where a product is marked with an asterisk, a comparison with the same product at the same size was not possible, so an equivalent has been substituted.

Several supermarkets, including Asda, have introduced areas within their stores where everything costs just a single, low price, and current marketing strategies are largely focused on drawing customers’ attention to where they can get the best buys, particularly through the “Smart Price” range.

Before Christmas, Tesco introduced the Big Price Drop, cutting the prices of its own-brand “Value” products including milk, bread and vegetables.

Sainsbury’s, which has often positioned itself as a mid-market retailer, has brought in a large number of “basics” goods and has introduced £1 offers, notably in fruit and vegetables. Even Waitrose, which recently moved into Scotland and prides itself on its upmarket status, now champions an “essentials” range.

One reason for these moves is to draw customers back from the discounters. In the 12 weeks to Christmas, Tesco’s market share fell below 30% for the first time since 2005, while bargain retailer Aldi saw a 19.7% rise in sales, taking its market share to 3.5%.

The price wars can have enormous benefits for savvy shoppers, who can make significant savings through small changes in their shopping habits.

The financial advice website, Moneysavingexpert.com has introduced a ‘Downshift Challenge’ encouraging shoppers to try dropping a brand level on everything they buy (e.g. to switch a luxury brand of jam for a mainstream brand,  swap a mainstream brand for the supermarket’s own brand, or the own brand for the low-cost version. )

Jenny Keefe, senior writer for the website, which is owned by the financial journalist Martin Lewis, says in the long-term, the cost differences can be huge: “Downshifting usually cuts the cost of a shopping trolley by 30%, or £1,700 annually for a family spending £100 a week.”

She stresses that the challenge is a suggestion for shoppers, rather than a formula they need to stick to religiously. “Unless you’re in dire straits, if you don’t like something, switch back up next time. Even if you only end up downshifting on half your stuff, that’s £850 a year saved. Our research showed that the biggest price drop is from going from own-brand to value brand.”

Analysts say the discount phenomenon is changing the retail landscape, and not just in the short term.  The cost-cutting trend is also reflected in a flurry of new pound-shop branches opening across Scotland, in retail parks as well as town and city centres, even in relatively affluent shopping destinations like Edinburgh , Perth, and Glasgow.

While pound shops may initially attract customers by offering low-price everyday products like toiletries, snacks and tools, the most successful have a sophisticated business model, constantly evolving the range of products to reflect both inflation and demand – because the price cannot change, the size of the products has to.
And as the customer base grows, new products like extra virgin olive oil are appearing on shelves with the middle class market in mind.

Poundland continues to be the biggest fixed price chain, with 47 shops in Scotland, including one recently opened in Johnstone. Poundland’s 24.9%  growth over the festive period was particularly fuelled by spending on gift boxes of chocolates, including 4 million bars of Toblerone, 3.6 million mini boxes of After Eight mints, 3.1 boxes of Maltesers and 1m packs of five Ferrero Rocher.

It has competition from smaller chains such as Poundworld, which opened its 11th store in Scotland at Hermiston Gait, near Edinburgh, in January. Poundworld is also expanding by opening a branch of its new brand Discount UK – a discount shop with varied price points – at Craigleith Retail Park near Edinburgh last week.  

Chris Edwards jnr, trading director at Discount UK, believes the downturn has been a significant factor in the company’s growth. “It’s understandable that due to the current economic climate, shoppers have less money at their disposal and are looking to make savings on everyday items wherever possible. Shoppers are refusing to pay over the odds for products when they have the option to pick them up for less.”

The concept of single-price point offerings is not a new one (five and dime stores began in America over a century ago, and were the basis of Woolworth’s foundation) but it is gaining momentum across the UK.

A study by the Local Data Company in November showed a 14.2% increase in pound shops in the last year, taking the UK total to over 3,000 pound shops, compared to around 2,700 book shops.

Research from data company Experian supports the conclusion that there has been a shift in consumer habits towards seeking far greater value for money. It has found that while pound shops tend to be clustered in less affluent areas, especially traditional manufacturing centres, their influence has spread to affluent towns and remote rural areas.

Richard Jenkings from Experian said: “They have moved far beyond being a bit of a novelty to form an integral part of the retail fabric of Britain’s high streets.”
While the need for shoppers to save money in times of economic hardship is a critical factor in discount shops’ success, Leigh Sparks, professor of retail studies at Stirling University, says their growth also represents a more fundamental change.

“In a recession period, shops such as this do tend to pop up, but there’s also something more structural happening. Poundland to me is what Woolworth's should have been. Woolworth's was a huge business that had lost its way, but its origins were in fixed price shops. Businesses like Poundland have stepped into that space.”

Discount shops now occupy the Woolworth's space literally as well as theoretically, with 29% of former Woolworth's premises across the UK now filled by discount stores, which are also moving into the spaces left empty as other High Street retailers fail.

Professor Sparks believes the overall message is that retail businesses need to be managed well to prosper. “As Albert Gubay, the founder of Kwik Save, once said: ‘Anyone can sell cheap groceries, but you have to be good to make money doing it.’”