Lidl GB spent £315m on price cuts and promotions including its "pick of the week" products, while sales of its Deluxe range rose 12% as more households chose to dine in rather than eat out, the company said.
"Customers are looking to trade up and treat themselves at home," Lidl GB chief executive Ryan McDonnell said.
Shoppers have flocked to discounters such as Lidl amid rising food inflation. In-store prices stepped up to an annual rate of 1.5% in August, up from 0.9% in July, with inflation for fresh produce remaining high at 3%.
Earlier this year Lidl overtook Morrisons to become the fifth-largest grocer in Great Britain, capturing an 8.6% market share in the 12 weeks to 17 May, according to market analyst Worldpanel by Numerator. Morrisons held an 8.3% share with sales growth of just 1.3%.
Lidl and rival Aldi have grown rapidly, partly due to slowing performance at Asda and Morrisons after both were acquired in debt-fuelled private equity deals. However, Aldi's growth has recently slowed as Tesco and Sainsbury's have matched discounter prices through loyalty scheme discounts.
Lidl said its Lidl Plus loyalty programme saw a 23% rise in participants. The analyst Clive Black, vice-chair at broker Shore Capital, contrasted this with Aldi, "where management has a clear strategy to deride such programmes". Aldi is the only major UK supermarket without a loyalty scheme.
This month Aldi UK boss Giles Hurley criticised some loyalty discounts, telling the BBC that they start with "unrealistically high prices" that then drop, which can "dupe customers". The UK competition watchdog investigated supermarket loyalty pricing in 2024 and found that shoppers "almost always make a genuine saving".