Aldi continues to surge ahead of its rivals in grocery in posting a record market share and rapid sales growth.

The German discounter posted an all-time record share of 3.5% in the 12 weeks to May 12, up from 2.8% last year, while its year-on-year growth rate was at its highest ever level at 31.5%, according to Kantar Worldpanel data.

Aldi has enjoyed strong growth in the last year as its value proposition and store expansion programme have allowed it to reach more cash strapped shoppers. Aldi was the only grocer to increase advertising spend in 2012.

Archrival Lidl also enjoyed a strong period with sales growth of 8.9% and a market share of 3%, up from 2.8% last year.

Kantar said the market remains “polarised” with upmarket grocer Waitrose enjoying 12% growth and maintaining a record share of 4.9%.

Of the big four grocers, Sainsbury’s continued to enjoy the strongest growth at 5.6%. Asda 2.8%, Tesco 1.7% and Morrisons 1.2% with only Sainsbury’s ahead of the average grocery market growth of 3.9%.

Farm Foods grew sales 6.2%, Iceland 5.2% and The Co-operative Food’s sales shrunk by 1.2%.

Kantar Worldpanel director Edward Garner said: “The success of Aldi, Lidl and Waitrose are clear examples of how shopping habits are divided across the country.  For many consumers, the discounters are increasingly becoming part of the weekly shop – supplementing trips to the big four retailers and offering a convenient and cheaper option. 

“We expect this growth to continue, particularly as store expansion plans open up the discounters to a wider number of customers.”

He added: “Although Morrisons shows a share loss, it is worth noting that the retailer returned to growth in 2013 and continues this upward trend in the latest period − growing 1.2%. With its plans for online and accelerated convenience store coverage now in place, the retailer will hope that successful implementation will return it to share growth.”

Kantar Worldpanel director Ed Garner on the figures