Aldi and Lidl close in on big four supermarkets after another year of breakneck growth

With 8.1% market share, Aldi is now within touching distance of the more established Morrisons, with 10%

Lidl’s UK sales grew at 19.7 per cent, the fastest increase of any supermarket chain (Getty)

Discount chains Aldi and Lidl recorded breakneck growth last year as the German discounters continued to gain ground on the UK’s big four supermarkets.

Aldi’s sales jumped 18.1 per cent in the 12 weeks to 21 May, compared to the same period in 2016, according to market research firm Nielsen.

With 8.1 per cent market share of the UK’s highly competitive grocery sector, Aldi is now within touching distance of the more established Morrisons, the smallest of the big four with 10 per cent of the market.

​Morrisons has seen some success of late thanks to a turnaround programme under chief executive David Potts. However it could only notch 1.4 per cent growth for the period.

Lidl’s UK sales grew at 19.7 per cent, the fastest increase of any supermarket chain, Nielsen found.

Amongst the big players, Tesco topped the list for the second consecutive month. It increased sales by 2.2 per cent, well ahead of 1.2 per cent for Sainsbury’s and a 0.1 per cent decline for struggling Asda.

Tesco is still comfortably the UK’s biggest supermarket chain with 27.2 per cent market share, compared to 15.5 per cent for nearest rival Sainsbury’s and 14 per cent for Walmart-owned Asda.

The UK competition watchdog announced on Tuesday that it was investigating Tesco’s proposed £3.7bn merger with wholesaler Booker.

The Competition and Markets Authority said it will look into whether the deal “could reduce choice and competition for shoppers and other customers, such as stores currently supplied by Booker”.

Also on Tuesday, Tesco chief executive Dave Lewis was named as a prosecution witness in the trial of three former senior executives at the retailer relating to an accounting scandal dating back to 2014, Reuters reported.

Christopher Bush, former managing director of Tesco UK, Carl Rogberg, former UK finance director, and John Scouler, former commercial director, were each charged by the Serious Fraud Office in September with one count of fraud by abuse of position and one count of false accounting.

Mike Watkins, Nielsen’s UK head of retailer and business insight said Tesco had benefited from a strategy of simplifying ranges and promotions, which had attracted more customers.

He added: “Rising inflation means people will be more aware of balancing household budgets, which may encourage spending more on eating at home, rather than at restaurants.”