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After Lidl announced the ‘biggest price cut of all time’ in Germany last week, rivals Aldi Nord and Süd are launching the counterattack in a battle for price leadership that also affects other retailers.
Frontal attack
With a remarkable video showing shoppers singing the praises of low prices at Lidl to the tones of the German national anthem, the discounter announced last Friday what it calls “the biggest price cut in its history”. 500 products will be permanently reduced in price, with discounts of up to 35 %. The retailer even proclaimed itself Preissieger (“price winner”), claiming to be 5 % cheaper than Aldi Nord and Aldi Süd.
The campaign came as a complete surprise for the competition, and is above all a frontal attack on arch-rival Aldi, which has always profiled itself as the true price leader in Germany. “For us, price leadership is not a short-term action, but a fundamental principle“, Aldi CEO Felix Rottmann responded in Lebensmittel Zeitung. A reaction was therefore unavoidable.
Fear of escalation
Aldi is now cutting the prices of about 100 good-selling products, including fish fingers, the Tandil detergent, frozen pizza, cottage cheese, ice cream and frozen chips. Unlike Lidl, Aldi did release the full list of affected products in the process.
The price competition between Aldi and Lidl is also prompting other food retailers in Germany to act: Edeka, Rewe and even Kaufland, Lidl’s sister company, also announced price cuts for similar products in the meantime. This makes observers fear a larger-scale price war on the German market that would put further pressure on the margins of all retailers and suppliers.
