Last updated 09:24, Saturday, 20 September 2008

It is hard to escape all the stories of doom and misery, redundancies and price increases... but there is a small reason to cheer in the supermarkets.

Following the Government’s announcement that inflation rose to 4.7 per cent last month, supermarket giants Tesco and Asda have announced a new round of price cuts.

As surveys show that more shoppers are turning to discount stores such as Lidl, Netto and Aldi, the ‘big-name’ supermarkets are battling to keep their share of an increasingly penny-wise market.

Aldi posted 20.8 per cent growth in sales this month, while Lidl grew by 11.1 per cent in the 12 weeks up to September 7.

Tesco bosses reckon UK consumers are more concerned about food prices now than they had been for the last 20 years.

The company has just launched a range of 350 new products under the Discount Brands at Tesco label as well as price cuts across other own-brand and branded items.

It claimed the discounts could save consumers almost £24 a week on a typical shopping basket.

Tesco commercial director Richard Brasher said: “As customers tighten their belts in hard times, they tend to shop around for the best prices.

“Our research shows just how keenly they are feeling the need to watch their budgets.”

Meanwhile, Asda chiefs are confident that food price inflation has peaked and have announced a massive 5,000 price cuts.

The supermarket group has cut the price of every product in its budget Smart Price food range as well as other brand and own-label items and claims it will mean shoppers can cut their weekly bill by more than 50 per cent.

Expect another round of savings to be announced in a week’s time when Lidl launches its half-price offer on all fresh fruit and vegetables.