Based on in-store observations in three major UK retailers, in-store interviews (2019) and questionnaires filled out at home and returned (921), use of nutrition information on food labels and its understanding were investigated. Respondents' nutrition knowledge was also measured, using a comprehensive instrument covering knowledge of expert recommendations, nutrient content in different food products, and calorie content in different food products. Across six product categories, 27% of shoppers were found to have looked at nutrition information on the label, with guideline daily amount (GDA) labels and the nutrition grid/table as the main sources consulted. Respondents' understanding of major front-of-pack nutrition labels was measured using a variety of tasks dealing with conceptual understanding, substantial understanding and health inferences. Understanding was high, with up to 87.5% of respondents being able to identify the healthiest product in a set of three. Differences between level of understanding and level of usage are explained by different causal mechanisms. Regression analysis showed that usage is mainly related to interest in healthy eating, whereas understanding of nutrition information on food labels is mainly related to nutrition knowledge. Both are in turn affected by demographic variables, but in different ways.