Cost of living: Aldi overtakes Morrisons as fourth-largest supermarket as food inflation hits new record

·2-min read

The stampede to discount chains has helped Aldi overtake Morrisons as the UK's fourth-largest supermarket chain for the first time - with inflation continuing to affect grocery bills.

Kantar Worldpanel reported that Morrisons had a 9.1% share of the grocery market in the 12 weeks to 4 September compared with Aldi's 9.3%.

Discounters have been snapping at the heels of the so-called "big four" - also including Tesco, Sainsbury's and Asda - as the cost of living crisis has worsened.

Kantar said its data shows grocery inflation is at a new record rate of 12.4% last month - adding £571 to the average annual bill. The sum had stood at £533 in July.

Prices were still rising fastest in markets such as milk, butter and dog food, echoing the picture of the previous month.

They are up by about 30% each over the past year as families get to grips with rising bills across the board.

The government is planning to limit hikes in energy bills - the major component of inflation - from October through the new energy price guarantee.

Businesses will also be helped with their costs under the government aid, potentially helping to ease the wider pace of price increases this winter as growing costs are passed on in the economy.

Nevertheless, households and firms both face paying much more for energy this winter than they did during 2021/2022.

The Kantar research showed sales of the cheapest own-label products were up by a third compared with a year ago as shoppers sought savings.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "The latest [grocery inflation] 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."

Aldi's sales rose by 18.7% over the 12 weeks to 4 September 2022, Kantar reported, while Lidl grew sales by 20.9% and saw its market share increase to 7.1%.

Of the other established chains, only Morrisons and Waitrose saw declines in the period.