Hard discounters Aldi and Lidl are prospering as the economic squeeze begins to hit shoppers, according to the latest TNS grocery market share data.

Aldi has shown a phenomenal 19 per cent growth in sales to take its market share to 2.8 per cent, up from 2.5 per cent a year ago. Lidl has also grown strongly with 9.6 per cent growth, while sales at fellow value player Iceland climbed 12.2 per cent.

According to TNS, Aldi's growth has come almost entirely from new customers, helped by new store development and investment in advertising.

Among the big four supermarkets, the Yorkshire-based pair are beating the Southerners. Morrisons showed annual sales growth of 8.7 per cent while Asda was up 7.6 per cent.

Tesco and Sainsbury's showed lower growth and both lost market share, with Tesco down 0.2 per cent to 31.1 per cent and Sainsbury's down 0.3 per cent to 16 per cent – 0.9 per cent behind Asda in the battle to be the UK's second biggest grocer.

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