Around half of its products are priced at a pound, but the business says by the end of this week 60% of what it sells will be a pound or less.

The discount chain says it is seeing a rise in customer numbers as people seek savings as the cost of living rises.

Recent surveys have suggested customers are spending less on their food shop because of rising prices.

Barry Williams, Managing Director of Poundland said there is now a “definite dynamic” of shoppers migrating away from major supermarkets to the discounters.

“I think you’re seeing a shift, a flight to value, if you like, from the traditional grocers, the major multiples, into the discount channel where we operate. Most discounters are performing better at the moment,” he said.

He says customer numbers are up 5-10% compared with the same period last year.

Mr Williams says people are shopping around and controlling their spending as much as they can.

“What we’re definitely seeing is customers are prioritising essential areas of spend. It’s more around fast moving consumer goods, it’s more around food. .. perhaps a few less items in each basket.”

Sales of frozen food are up, a category which he says tends to perform well at difficult times as it helps shoppers manage waste.

Research firm NielsenIQ in its latest shopping survey found that one in four households were monitoring the overall cost of their shopping basket, including seeking out their favourite brands at value retailers like Poundland and Home Bargains.

Mr Williams said with inflation soaring to its highest level in years, Poundland’s one pound price point is being expanded to make it easier for customers to manage their budgets. Two thirds of the products will be branded goods.

“Customers are being really mindful about how much they spend, this is a really easy way for them to control that spend as well,” he said.

Nearly half of adults surveyed by the Office for National Statistics (ONS) say they have bought less food in the past fortnight due to higher prices.

The price of food was also the most common reason for why those asked were seeing their monthly outgoings rising overall, the ONS said.

The ONS said its feedback from supermarkets also suggested customers were spending less on their food shop because of the rising cost of living.

It found that sales in supermarkets dropped 1.5% in May, with a 2.2% fall in specialist shops such as butchers and bakers. Retail sales overall fell by 0.5% in May.

Prices overall are continuing to rise at their fastest rate for 40 years, with UK inflation at 9.1%, the highest level since March 1982.

Fuel and energy prices are the biggest drivers of inflation, but food costs drove the most recent rise in May, with prices for bread, cereal and meat climbing.

That means shoppers could be paying on average an extra £32 a month for food and other groceries.

In April, the consumer insight firm predicted the cost of the average annual supermarket shop would go up by £271 in 2022.

The upward revision shows “just how sharp price increases have been recently and the impact inflation is having on the sector”, said Kantar.

The survey also showed grocery prices rose by 8.3% over the past four weeks, the highest rate in 13 years.

“The inflation number makes for difficult reading and shoppers will be watching budgets closely as the cost-of-living crisis takes its toll,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

Official figures for April showed overall inflation – the increase in prices over time – was running at 9% a year in the UK – the highest rate for 40 years. The Bank of England has warned inflation might exceed 11% later this year as the prices of fuel and food put pressure on household budgets.

The latest inflation figures for May are due to be published on Wednesday.

Overall supermarket sales are declining, down by 1.9% in the 12 weeks to the 12 June – the smallest fall since October 2021.

Mr McKevitt said: “The sector hasn’t been in growth since April 2021 as it measures up against the record sales seen during the pandemic. However, these latest numbers show the market is to an extent returning to pre-Covid norms as we begin comparisons with post-lockdown times.”

Kantar said that online sales have continued to fall as lockdown restrictions eased, recording the 12th consecutive monthly fall to leave digital orders down nearly 9% in June.

It said this could be the result of people looking to further cut costs by ” avoiding delivery charges” though it added that the recent good weather may be encouraging more people to take a trip to the supermarket.

The researchers also found shoppers are switching from branded items, sales of which are down by 1%, to supermarkets’ own-label products.

“Sales of these lines, which are often cheaper, have risen by 2.9%, boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires,” said Mr McKevitt.

“We can also see consumers turning to value ranges, such as Asda Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money and together all value own-label lines grew by 12%.”

Lidl was the fastest growing supermarket over the 12 weeks with sales up by 9.5%: Morrisons saw the biggest fall with sales down by 7.2%.