A third of people planning trips abroad this year will take a self-catering holiday, according to research for the annual Post Office Travel Money Self-Catering Holiday Report, produced in partnership with Monarch Holidays.

More than two-in-five (42%) of families told the Post Office they chose their most recent self-catering holiday to cut costs, so the report suggests heading to the Spanish Islands or Portugal’s Algarve because supermarket prices are up to 84% lower than in destinations further east.

This advice comes after the consumer research also revealed that more than half of families bust their budget on their last self-catering holiday – with one-in-six admitting they spent over £200 more than planned. Post Office Travel Money and Monarch Holidays surveyed the cost of a weekly family shop in ten European destinations and found big differences for 15 typical food and drink staples.

The cheapest destination proved to be Mallorca where the shopping basket of self-catering basics came to £31.91 – 5% less than in the Algarve (£33.65), runner-up in the survey. In contrast, Monarch Holidays' resort staff discovered that the same shopping basket cost 84% more (£58.74) in Dubrovnik, the most expensive destination surveyed, while supermarkets in Eastern Med resorts were also between 31-40% pricier than Mallorca.

With a fall of 6.1%, Mallorca was one of four destinations where supermarket prices were found to have dropped year-on-year – despite the fact that sterling buys around 10% fewer euros than last June. The biggest fall of 20% was in Menorca (£35.03 - the fourth cheapest in the survey), while prices fell 3.7% in Lanzarote (£34.41) – making the Spanish Islands great value for self-caterers.

The fourth destination where grocery prices have fallen over the past 12 months is Cyprus, which registered a 6.2% drop. At £44.29, the shopping basket in Cyprus is at its lowest level since Post Office Travel Money started compiling the self-catering report in 2011. Prices are now 39% cheaper for UK tourists than five years ago when the same items cost £72.48.

Andrew Brown of Post Office Travel Money said: “It’s good to report that the cost of self-catering groceries has fallen in parts of Europe despite the fall in sterling’s value since last year. However, the wide variations we found across the ten destinations surveyed mean families should do their homework and check prices before booking. Mallorca and Portugal are great value for self-catering but Turkey, Greece and Croatia will be more expensive.

“Although self-catering can be a great way to save money, spending can easily get out of hand. Just over half of the holidaymakers we spoke to shopped in supermarkets but almost as many used local mini-marts, which are significantly more expensive. Our advice is to do one big supermarket shop and choose cheaper local brands. Buy fresh fruit and vegetables in local markets and only use mini-marts to top up supplies. If you are planning to eat out during your stay, make it a lunch time set meal, a cheaper bet than eating a la carte in the evening.

“Another way for families to avoid busting their budget is to steer clear of changing cash at the airport or at overseas ATMs where poor rates and charges will cost them dear. Planning ahead and loading the holiday budget onto a pre-paid card is a great way to keep costs in check.”

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