At the moment I play the alto sax and I am working towards my Grade 8. I feel slightly as if I am outgrowing my alto and that I want to move on to something different. I want to stick with the saxophone but which one should I pick?

I know that many people start on the alto and move on to the tenor - this sounds like a better option than the soprano (which is more of a novelty instrument ). I enjoy playing in different jazz groups with my alto but I a worried that there is not so much of a demand for the tenor.

Is this the case or am I getting confused?!

A few points in no particular order

What do you mean by "outgrowing"? Another saxophone won't really let you do anything you can't on an alto, it will just be at a different pitch.

Soprano sax is far from being a novelty instrument, in jazz or classical terms. John Coltrane, Wayne Shorter, Dave Liebman, Lee Konitz, Ingrid Laubrock, Courtney Pine and tons more are all great jazz soprano players. I'm sure others can add classical players to the list

I think, in jazz, there is at least equal, if not more, demand for tenor players than for alto and in amateur circles fewer tenor players around. I know that in most of the jazz courses I've been on there have been far more alto players than tenor and although I play both I tend to play tenor to balance the numbers (and because I like it better!)