Aldi overtakes the Co-op to become the UK's fifth biggest supermarket

Discount grocer Aldi has overtaken the Co-op to become Britain's fifth biggest supermarket, according to industry data.

Respected market research body Kantar Worldpanel said sales at Aldi lifted 12.4% year-on-year in the 12 weeks to 29 January, taking its market share to 6.2%, ahead of the Co-op's 6%.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "Just a decade ago Aldi was the UK's tenth largest food retailer, accounting for less than 2% of the grocery market. Since then the grocer has grown rapidly, climbing the rankings by an impressive five places to hold a 6.2% market share."

McKevitt added that during the past three months Aldi attracted 826,000 more shoppers than the same period a year ago.

German grocers Aldi and Lidl have dragged major supermarket chains such as Tesco and Sainsbury's into a price war over the past three years as shoppers look for bargains.

However, food imports have become more expensive in recent months following the 16% slide in the value of the pound since June's Brexit vote.

McKevitt said: "Rising prices – which we saw at Christmas for the first time since 2014 – have continued into the new year, with like-for-like inflation on a basket of everyday groceries climbing to 0.7%."

He added that if prices continue rise to at the same rate for the rest of the year shoppers will be around £27 worse off.

Despite losing ground to Aldi, Co-op's sales rose by 2% in the three months to the end of January, compared to the same period a year ago, putting it well ahead of much of the top-flight competition.

Among the Big Four supermarkets sales at market leader Tesco rose 0.3% and at Morrisons they were also up 1.9%. Revenues were flat at Sainsbury's, but fell by 1.9% at Asda.