Aldi's brand is now worth more than Tesco's, according to the Millward Brown and WPP's Brandz Most Valuable Global Brands report.
Aldi's brand value has increased by 22% to €11.6m from 2014 and it is now in the top 10 retail brands, the report shows.
Aldi is now the 90th most valuable global brand, according to the report by Millward Brown.
Tesco's brand value has decreased by 37% from 2014 and it is now worth €9.4m down from the €14.8m it was worth last year, it shows.
The report says that the Tesco brand value decline in the UK in part reflected a consumer attitude shift in favour of smaller stores, discounting and convenience.
Lidl has come in at number 20 of the top 20 retail brands. The German discounter's brand value in 2015 is worth €6m according to Millward Brown.
This is an increase of 27% in brand value from last year for Lidl and the retail category grew 24% from last year, it says.
E-commerce has had an impact on global brands, both Alibaba and Amazon have no physical stores but they surpassed Walmart which has over 10,000 stores worldwide and ranks third in the top 20, the report says.
Due to the rise of e-commerce, combined with demographic trends, smaller households and more urban living, consumers did less shopping with big retailers, and gaining share of life became more important, according to Kantar Retail.
Anne Zybowski, Vice President Retail Insights with Kantar Retail, says that fewer brands meet broader needs.
We’re seeing retailer rationalization. Consumers are consolidating their shopping routines with fewer select retailers that are meeting broader needs.
"To succeed, retailers need to build and sustain loyalty at a new level. They must start with a shopper-first mentality that’s more a slogan on the wall.
"It requires mining data to get beyond identifying people by broad demographic categories, and instead achieve personalization that recognizes individual shoppers and their specific needs that go beyond products into streamlining shopper routines, and delivering on convenience," she says.