During the twelve weeks ending 31 January 2015, Aldi's sales grew 17.3 percent year-on-year, while Lidl's climbed 13.8 percent.
Tesco, the U.K.'s largest supermarket, along with other big name retailers Sainsbury's and Walmart's Asda all saw their sales dip by over 1 percent over the same period.
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"The 10 percent market share for discounters has not been seen since the heyday of Kwik Save some 15 years ago," said Nielsen's U.K. head of retailer and business insight, Mike Watkins.
"Initially built on the premise of saving money, the new waves of discounters are now a regular part of grocery shopping and have changed shopping habits forever. Discounters are no longer solely associated with price. They've been very astute at promoting the quality of their offerings to appeal to a wider range of consumers," he said.
As competition for market share hots up, retailers are splashing out on advertising more. In January alone, Sainsbury's shelled out £4.6 million ($7 million) on TV and press campaigns, Nielsen said..
Close behind Sainsbury's was Aldi, which spent £4.5 million on ads in the four weeks to January 31, while Marks and Spencer have more than doubled their advertising spend.
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