This week, discount retailer Aldi revealed UK sales in the year to December 2022 increased by £1.9 billion or 14% to a staggering £15.5 billion, a new record in its 33 years of operating here.

The company, which has attracted around one million more customers to its stores over the past year, said rising living costs have created ‘a shift in attitudes’, adding that a ‘new generation of savvy shoppers have turned their back on traditional, full price supermarkets’.

According to the latest figures from Kantar Worldpanel, Aldi’s market share of UK grocery spending in the 12 weeks to the start of September was 10.1% compared with 9.3% in the same period a year ago.

The firm is already the UK’s fourth-largest grocer by market share, having overtaken Morrison at the start of 2023, and is closing in on third-placed Asda which has been losing share over the last 12 months.

Its rapid growth – which was 17.1% in the 12 weeks to 3 September compared with 8.1% for the sector as a whole – has been fueled by an insatiable appetite for new store openings. It is far from finished.

The firm, which operates more than 1,000 UK stores, said it plans to open another 18 sites before the end of the year and is committed to opening more than 500 new UK stores altogether, investing more than £1.4 billion during 2023 and 2024.

Tesco (TSCO) may still control more than a quarter of the UK grocery market, and may have gone some way to counter the threat from Aldi with its price-match campaign, but it can’t afford to let the discounter park yet more tanks on its lawn and Aldi’s actions ramp up the pressure ahead of its first half results on 4 October. The same goes for Sainsbury’s (SBRY).

For branded goods producers, the prospect of Aldi increasing its market share with its store roll-out is just as ominous.

‘One of the big stories of recent times has been the boost in own-label sales which dominate Aldi and Lidl’s shelves,’ says Kantar’s head of retail and consumer insight Fraser McKevitt.

‘Sales grew again by 9.9% in the latest month and supermarket lines now make up over half of everything we buy. This is equivalent to a £3 billion shift in sales away from brands. The discounter model of offering everyday low value and fewer promotions has caught on in the wider market, with only 26% of spending now on deals compared with 38% a decade ago.’

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