Kantar data indicates that Aldi has surpassed Morrisons to become the fourth-largest UK supermarket for the first time.
Kantar reported that discounters are gaining market share as consumers take the initiatives to manage their finances.
Energy and fuel costs are soaring, and the crisis in Ukraine is squeezing grain production and driving up fertilizer prices, all of which are driving up food prices.
In August, according to Kantar, food price inflation reached a record 12.4%.
Prices for milk, butter, and dog food rose especially rapidly.
As food prices rise and living expenses bite into household budgets, inflation in the United Kingdom is climbing at its fastest rate in 40 years.
Fraser McKevitt, head of retail and consumer insight at Kantar, remarked, “There appears to be no end in sight for grocery inflation, as the rate at which food and beverage costs are rising continues to rise.”
“To control their budgets, consumers are visiting a wider variety of outlets, which benefits bargain grocers.”
Additionally, consumers are spending less by purchasing more own-brand products, with sales of the cheapest own-brand products increasing by a third compared to the previous year.
However, according to Kantar, food price increases will increase the average annual grocery bill by £571 to £5,181.
In the 12 weeks leading up to September 4, Kantar said that Aldi’s sales increased by nearly a fifth compared to the same period a year earlier, giving them a 9.3% market share.
Giles Hurley, chief executive officer of Aldi UK and Ireland, stated that consumers “vote with their feet” by selecting Aldi over full-price established supermarkets.
During the same period, Morrisons’ sales decreased by 4.1%, and its market share decreased to 9.0%.
According to Morrisons, market share was “partly the result of new shop openings.”
Although Morrisons has not added major new space in a while, several of its competitors continue to open new stores, according to the report.
However, it stated that “customers don’t care about market share figures; they care about value, quality, provenance, and service, and that will continue to be our priority.”
Mr. McKevitt stated, “At the beginning of the 2010s, Tesco, Sainsbury’s, Asda, and Morrisons accounted for more than 75 percent of the market, but the classic big four no longer exist.
In recent months, the discounters’ sales have increased dramatically, bringing in more and more clients.
He stated that Aldi had regularly opened new locations and that 14.2 million customers had shopped at the supermarket chain in the previous three months.
Over the past decade, Aldi and Lidl have expanded and increased their market share in the United Kingdom.
However, online grocer Ocado, which has also been expanding, said it anticipated a slight decline in sales this year as customers purchase fewer things and seek cheaper alternatives.
The joint venture between Ocado Group and Marks & Spencer had previously expected a modest increase in sales.
In a financial update, Ocado stated that it anticipated profitability to be “near to break-even” this year, as increased costs, notably electricity and dry ice, and a decline in the average value of customers’ shopping baskets would offset an increase in client count.
