Aldi’s British arm said trading has improved significantly over the last six months as shoppers turn to the store to save money.
Privately-owned Aldi said it had added another 1.5mln customers in the last 12 weeks as consumers switched “in droves”.
The German discounter said operating profit sunk to £60.2mln from £287.7mln in 2021 due to higher staff costs, Covid-related expenses and discounts.
“Preserving our price discount and rewarding our people will always be more important to us than short-term profit,” Giles Hurley, chief executive, added.
Revenue, meanwhile, advanced 0.9% to £13.6bn.
Aldi’s sales growth of 18.7% over the 12 weeks to 4 September took its market share to a 32-year high of 9.3%.
It also marked the first time either of the German discounters – Aldi or Lidl – had moved into the top four of the UK's largest supermarkets with Aldi leapfrogging Morrisons.
"We haven't seen growth rates like this since the last recession," said Hurley, referring to 2008-2009.
Consumers have been purchasing fewer big brands and cheaper own-label products to lessen the strain on their pockets, he added.
Both German discounters were financially hurt during the pandemic given their lack of online presence, but their fortunes reversed in recent months.
Aldi, which already has 970 stores, plans to open another 16 before the end of the year.
“From our carefully selected range to our smaller format stores to our trademark efficiency, we can leverage our unique approach for the benefit of all of our customers,” he said.