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Catherine Furze

Aldi beats Morrisons to be the UK's fourth biggest supermarket

Aldi has overtaken Morrisons for the first time as cash-strapped shoppers try to stretch their budgets in the cost of living crisis.

Monthly figures from data company Kantar revealed that German chain Aldi’s market share rose by 1.2% over the past three months, meaning it has overtaken Morrisons to take its place in the so-called ‘big four’ supermarkets in the UK. Frozen foods chain Iceland also won market share, with sales 5.8% higher than in 2021.

The figures show that families are striving to find value for money when shopping for groceries, as grocery price inflation hit a new record of 12.4% in August, adding £571 to the average annual grocery bill. Milk, butter and dog food jumped up especially quickly at rises of 31%, 25% and 29% respectively.

Read more: Tesco cancels shopping deliveries on day of Queen's funeral bank holiday but some shops remain open

Aldi’s sales rose by 18.7% over the three to September 4 2022, reaching a 9.3% market share. Rival German discounter Lidl grew sales by 20.9% and its market share has increased to 7.1%, putting it in fifth place, in front of Co-Op and Waitrose

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Back at the start of the 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for over three quarters of the sector but that traditional big four is no more.” He said an expanded shopper base had led to “dramatic sales increases” for Aldi and Lidl, and sales of the cheapest value own label products are up by a third compared to a year ago in all supermarkets.

Overall spending on own-label lines was £393m higher during the last four weeks, pushing own-label’s share of the market to 51.1%. “In what is a fiercely competitive sector, supermarkets are reacting to make sure they’re seen to acknowledge the challenges consumers are facing and offer best value, in particular by expanding their own-label ranges,” McKevitt said.

Tesco, Sainsbury’s and Asda all achieved their best sales performance since April 2021. Tesco’s market share is now 26.9% following a sales boost to sales, while Asda currently holds 14.1% of the market following 2.2% sales growth. Sainsbury’s accounts for 14.6% of the market.

Mr McKevitt said: “It seems there’s no end in sight to grocery inflation as the rate at which food and drink prices are increasing continues to accelerate. Now standing at 12.4% for August, the latest figure means that the average annual grocery bill will go from £4,610 to £5,181 if consumers don’t make changes to what they buy and how they shop to cut costs."

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