Lidl says it has taken £58m in additional sales from traditional supermarkets in the past month, as shoppers look for ways to save money, after quadrupling profits in a bounce back from pandemic disruption.

The German-owned discount grocer, said its British sales rose 1.5% to £7.8bn in the year to the end of February but pretax profits surged 319% to £41.1m as the group trimmed costs as measures to control the Covid-19 virus eased.

The company, which now operates 935 stores across England, Scotland and Wales and employs more than 28,000 people, said the profit increase had come despite a £50m rise in pay for hourly-paid staff and £653m spent on 50 new stores and other assets including distribution centres in Luton, Bedfordshire, and Belvedere in south-east London.

Ryan McDonnell, the chief executive, Lidl GB, said the company was now serving 770,000 more customers a week than last year: “As the cost of living crisis deepens, we are more focused than ever on supporting our colleagues, our customers and the communities we serve … As a discount supermarket we are in the best possible position to support people through these challenging times, and it’s our absolute priority that we continue to do so.”

He said shoppers were are already stocking up on mainstay Christmas items with sales of party food up 21% and Panettone up 8% on last year. The company said it had also sold a higher proportion of British meat, poultry, eggs and pork than other supermarkets.

Lidl’s surge in sales and profits comes as British shoppers increasingly head to discount supermarkets in an attempt to keep food bills down as grocery price inflation reaches its highest level in a decade.

During the past year, Lidl has overtaken the Co-op to become the UK’s sixth-largest supermarket chain while rival discounter Aldi leapfrogged Morrisons to take fourth place. Both are seeing sales rise by more than 20%, according to the latest data from market analysts Kantar, much faster than traditional supermarkets.

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