diff --git a/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.cpp b/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.cpp
index b834ed82729..6b4746b1320 100644
--- a/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.cpp
+++ b/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.cpp
@@ -195,7 +195,14 @@ AggregatingSortedAlgorithm::AggregatingMergedData::AggregatingMergedData(
     MutableColumns columns_, UInt64 max_block_size_, ColumnsDefinition & def_)
     : MergedData(std::move(columns_), false, max_block_size_), def(def_)
 {
-        initAggregateDescription();
+    initAggregateDescription();
+
+    /// Just to make startGroup() simpler.
+    if (def.allocates_memory_in_arena)
+    {
+        arena = std::make_unique<Arena>();
+        arena_size = arena->size();
+    }
 }
 
 void AggregatingSortedAlgorithm::AggregatingMergedData::startGroup(const ColumnRawPtrs & raw_columns, size_t row)
@@ -212,8 +219,17 @@ void AggregatingSortedAlgorithm::AggregatingMergedData::startGroup(const ColumnR
     for (auto & desc : def.columns_to_simple_aggregate)
         desc.createState();
 
-    if (def.allocates_memory_in_arena)
+    /// If and only if:
+    /// - arena is required (i.e. SimpleAggregateFunction(any, String) in PK)
+    /// - arena was used since otherwise it may be too costly to increment atomic counters inside Arena.
+    ///   i.e. SELECT with SimpleAggregateFunction(String) in PK and lots of groups
+    ///   may produce ~1.5M of ArenaAllocChunks atomic increments,
+    ///   while LOCK is too costly for CPU (~10% overhead here).
+    if (def.allocates_memory_in_arena && arena->size() > arena_size)
+    {
         arena = std::make_unique<Arena>();
+        arena_size = arena->size();
+    }
 
     is_group_started = true;
 }
diff --git a/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.h b/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.h
index da4ec876b69..e572ed7d526 100644
--- a/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.h
+++ b/src/Processors/Merges/Algorithms/AggregatingSortedAlgorithm.h
@@ -73,6 +73,7 @@ private:
         /// Memory pool for SimpleAggregateFunction
         /// (only when allocates_memory_in_arena == true).
         std::unique_ptr<Arena> arena;
+        size_t arena_size = 0;
 
         bool is_group_started = false;
 
diff --git a/tests/performance/aggregating_merge_tree_simple_aggregate_function_string.xml b/tests/performance/aggregating_merge_tree_simple_aggregate_function_string.xml
new file mode 100644
index 00000000000..d62f8d8e088
--- /dev/null
+++ b/tests/performance/aggregating_merge_tree_simple_aggregate_function_string.xml
@@ -0,0 +1,21 @@
+<test>
+    <create_query>
+        CREATE TABLE bench
+        ENGINE = AggregatingMergeTree()
+        ORDER BY key
+        SETTINGS index_granularity = 8192
+        AS
+        SELECT CAST(reinterpretAsString(number), 'SimpleAggregateFunction(any, String)') AS key
+        FROM numbers_mt(toUInt64(10e6))
+    </create_query>
+
+    <query>
+        SELECT *
+        FROM bench
+        GROUP BY key
+        SETTINGS optimize_aggregation_in_order = 1, max_threads = 16
+        FORMAT Null
+    </query>
+
+    <drop_query>DROP TABLE IF EXISTS bench</drop_query>
+</test>