The annual survey of 6800 shoppers judges the UK's top supermarkets on their shopping experience over the last six months both online and in store.
The fast-growing German discounter has impressed shoppers with the quality of its fresh and own-label food as well as its special offers, according to the annual best and worst supermarket satisfaction survey by Which?.
Asda was left at the bottom of the online supermarkets table, where it has been for more than a decade.
UK's biggest retailer Tesco has a 28 percent share of the British grocery market, while Aldi's sales increased by 16.2 percent and Lidl's by 16.3 percent, boosting their respective market shares to 6.9 percent and 5 percent.
Among the online supermarkets, Iceland came top for the third year in a row - a position in this year shares with Ocado.
They said: 'As Which? itself says, many customers praised our top-quality produce'. Tesco was ranked sixth and Asda and Morrisons were jointly ranked seventh, with Sainsbury's coming bottom.
Although shoppers described Aldi as "untidy" and having rushed checkouts, its pricing knocked higher-end supermarket Waitrose off the top spot and edge ahead of Marks & Spencer in second place.
Amazon Fresh, which only launched in 2016 and is only available in the south east of England, came in fifth position.
Tesco.com came sixth, followed by Sainsburys.co.uk.
This was largely down to a two-star rating Waitrose was given for value for money, compared to Aldi's five.
"At Aldi, we're proud to offer fantastic quality products at incredible prices and to be named the UK's favourite supermarket shows just how much we are resonating with shoppers".
Alex Neill, managing director of Which? home products and services, said: "With food costs rising it seems as though shoppers have felt the pinch and are voting with their feet and wallets".
"The big four supermarkets need to up their game or risk losing their customers to other supermarkets who are doing a better job of giving people what they want", said Neill.
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