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Aldi and Iceland have emerged as the UK’s favourite in-store and online supermarkets respectively in the annual Which? supermarket survey.

The German discounter knocked Waitrose off top spot, which it had held for three years, with premium retailer M&S rated second best by in-store shoppers, and Lidl taking third place.

Sainsbury’s finished in last position, with the least-satisfied in-store customers overall, while the other big four supermarkets, Asda, Morrisons and Tesco, completed the bottom half of the rankings. However, the results come as rumours circulate that Tesco may be planning to launch a new rival to discount stores.

Martin Lane, managing editor of money.co.uk, commented: “To have a bargain retailer knocking Waitrose off the top spot as the nation’s favourite demonstrates how shopping habits have changed.

“As a nation, we’re looking after the pound in our pocket more than ever before and with Aldi's “specially selected” premium items, the grocer is offering the same produce as the other big four supermarkets but without the expensive price tag.”

He added: “Aldi’s Specialbuys and Super 6 offers continue to make headlines and get customers through their doors who can forgive them for a slightly untidy store or rushed checkout experience because they’re getting such great value for money. This suggests there's no sign of a slowdown for the discount giant.”

The supermarket performed best in the ‘value for money’ category, scoring five out of five, with four-star ratings in ‘quality of fresh products’ and ‘quality of own-label products’.

In the online category, another budget retailer, Iceland, came out on top, beating off stiff competition from industry heavyweights Ocado, Morrisons, Waitrose, Tesco, Sainsbury’s and Asda, as well as newcomer Amazon Fresh.

Shoppers gave Iceland an overall customer score of 74 per cent, with five-star ratings for its convenient delivery slots and drivers’ service, and four-star ratings for its range of products, value for money, and the quality of both its own label and fresh products.

Iceland managing director Nigel Broadhurst said: “Growing recognition of the great products and outstanding service we offer is reflected in the rapid growth in registrations for our online platform, with its easy-to-use website, good availability of convenient delivery slots, and friendly and helpful drivers.

“The Power of Frozen [campaign] allows us to offer a unique range of great quality food from all over the world, all year round.”

The Which? customer score is derived from a survey of 6,800 members of the public in October 2017, and is based on a combination of customer satisfaction with a supermarket and the likelihood that they would recommend it to a friend.