Aldi is on track to overtake Morrisons as the country's fourth-biggest supermarket within weeks.
The German discounter increased its market share to 9.1% in the three months to August 7, from 8.2% a year ago, while Morrisons dropped from 10% to 9.3%, according to the latest figures from Kantar.
Clive Black, a retail analyst at Shore Capital, told the Telegraph: "In very short order, we'll be talking about a new Big Four: Tesco, Sainsbury's, Asda and Aldi. I think in the next one or two months, and there's no going back for a while."
Aldi and fellow German discounter Lidl have been boosted by "unnatural footfall," Mr Black said, as the cost-of-living crisis prompts many shoppers "who ordinarily would not be striving for deep value" to switch between grocery shops to keep costs down.
Supermarket inflation hit 11.6% last month, Kantar said, its highest level since at least 2008.
Fraser McKevitt at Kantar told the Telegraph: "Products like butter, milk and poultry in particular are seeing some of the biggest jump (in prices)."
Households are now expected to fork out an extra £533 a year, or £10.25 a week, on their supermarket shop - piling pressure on those already struggling to cope with rising energy bills and petrol prices.
Momentum
While Aldi is benefiting from the pressure, "momentum has been going backwards" at Morrisons after its sale last year, Mr Black said.
US private equity firm Clayton Dubilier & Rice won a £7billion auction for Morrisons last October but the deal only won approval from the competition watchdog in June.
"The acquisition of Morrisons, the amount of time it took for the mergers watchdog to look into it, there was an inability for the new owners to get into the business," Mr Black said.
Meanwhile, it has been reported that Iceland is offering customers interest-free loans to help with their food shop amid soaring inflation.
The supermarket had rolling the scheme out across Wales, where more than 500 customers used it.
Managing director Richard Walker said loans - provided by charity-owned lender Fair For You - would only be offered to those who can afford them.
Repayments are set at £10 per week, with customers able to choose the day they are made and overpay if convenient to them.
FTSE 100
The UK's top share index, the FTSE 100, was up 10 points at 7,546 shortly after opening this morning, following yesterday's 26-point gain.
Brent crude futures were 0.70% higher at $92.99 a barrel.
Companies reporting today
Half-year results: Balfour Beatty, Persimmon