With food prices on the rise and consumers looking for ways to save money, a thriving trade is being done online by websites selling discounted groceries past their official shelf lives.

Following on from the success of the freecycle movement which allows members swap unwanted household goods, sites offering clearance, short-dated and out-of-date food and drink have become the latest way to both cut costs and reduce waste.

One website, approvedfood.co.uk, this week reported a 500% year on year increase in sales in the last week of December, while another, foodbargains.co.uk, is running an apology on its website over backlogged orders due to high demand.

Environmental campaigners have welcomed the trend, saying it can help to reduce Britain's huge mountain of food waste.

Food charities estimate that more than seventeen million tonnes of surplus food, including fresh produce, is dumped by supermarkets in landfill every year, with a sales value of more than £18bn.

Most of the goods sold on discount sites are past their "best-before dates" but not the "use-by" dates, and have been bought at knocked-down prices from wholesalers, suppliers and supermarkets.

The sites offer a range of stock from many top brands, including Heinz, McVities, Baxters, Nescafe and Cadbury. Items range from tinned food (59p for tuna) to packet soup (19p each), toiletries (£1 for six toilet rolls) and pet food (50p a tin).

There is a predominance of less healthy options such as chocolates (10 Mars bars for £1), fizzy drinks (99p for 2 litres) and processed food (£1 for 48 bags of Cheese Doritos) although approvedfood.co.uk has introduced a healthy eating range (19p for wholegrain Ryvita) which includes options out of the normal bargain-basement range – sushi nori roasted seaweed 99p for six packs; tins of celeria strips for 99p; and cases of six Italian cold-pressed extra virgin olive oil for 49p a 500ml bottle (currently sold out).

Dan Cluderay, the founder of approvedfood.co.uk, said customers saved an average of 75% on recommended retail prices. "During November and December 2009 we sold over 500,000 items," he said. "Shoppers can spend £25 on an order with us and easily expect to see an equivalent shopping basket cost £100 in their local supermarket."

Customers are encouraged to buy in bulk, with both sites charging around £5 for delivery up to about 30kgs.

Cluderay stressed that consumers were not taking a gamble with their health by eating food past its best-before date, adding that there is genuine confusion over food labelling, mainly on the difference between "use by" and "best before" dates. "We never sell anything past its 'use by' date," he said, "but the 'best before' date simply refers to the product's optimum quality.

"Products past this date are still perfectly fine to consume and it's very unusual for anyone to be able to tell the difference."

The government's Food Standards Agency says that food that has passed a best-before date will be safe to eat when stored correctly, but advises consumers to never eat anything beyond its use-by date.

Last year the food and farming secretary Hilary Benn urged retailers to phase out the sell-by and best-before date labels on food in a bid to reduce food waste, saying they were confusing and meaningless.

Recent figures from his department, Defra, reveal that 370,000 tonnes of food is thrown away each year in the UK after passing its "best before" date, 40,000 tonnes of which had not even been opened while it was still edible.

A spokesperson for the Love Food Hate Waste campaign run by the government body Wrap – set up to advise the government on reducing waste and packaging- said: "It can sometimes be worthwhile to take advantage of promotional offers or last-minute deals, especially during the recession, but the key thing to remember is to make the most of what we buy — otherwise we only end up throwing good food and money away in the end.

"The average family could save just over £50 a month just by making the most of the food they buy. If you're buying dry cereals or products the key to making the most of a bargain is to store food well."