LONDON: Aldi has overtaken Waitrose to become the UK's sixth-largest supermarket in a further sign that the German discounter is mounting a serious challenge to its rivals, the latest industry data has revealed.

According to Kantar Worldpanel, the consumer insights firm, Aldi increased its sales by 16.8% and took its market share to 5.3% during the 12 weeks to 29 March.

That took it past Waitrose, the high-end chain owned by the employee-owned John Lewis Partnership, which secured 5.1% market share.

However, Waitrose's drop in the rankings was not caused by poor performance because it saw its sales increased a respectable 2.9% since the same time last year.

The only other supermarket chain to increase sales over the latest reporting period was Lidl, another German discounter that has been making significant progress in the UK's rapidly changing groceries sector.

Lidl increased its sales by 12.1%, taking its market share to 3.7%. Taken together, Aldi and Lidl now have a combined 9% share of the entire supermarket sector with Aldi just 0.7% behind the Co-op, the UK's fifth-largest chain.

"The changing structure of Britain's supermarket landscape is illustrated by two facts," explained Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

"Firstly, the so-called discounters Aldi and Lidl now command a combined 9% share of the market. In 2012 the same two retailers only accounted for 5.4% of grocery sales. Secondly, the 72.8% share taken by the biggest four retailers is now at the lowest level in a decade."

Indeed, it has been a mixed picture for the "Big Four". Tesco remains by far the largest chain with 28.4% of the market and, under the leadership of new CEO Dave Lewis, increased its sales by 0.3%.

Sainsbury's, which increased sales by 0.2% over the period, is now back in growth for the first time since August 2014 and, as a result, slowed the rate at which it is losing market share – down just 0.1% to 16.4%.

However, Asda and Morrisons both recorded sales declines of 1.1% and 0.7% respectively, taking their respective market shares to 17.1% and 10.9%.

Finally, Kantar Worldpanel noted that grocery prices are now 2% cheaper than they were a year ago, signalling the extent to which the major supermarkets have had to introduce price cuts in response to the threat from Aldi and Lidl.

Data sourced from Kantar Worldpanel; additional content by Warc staff