A week after Lidl launched a major price offensive in Germany, it appears that its competitors were successful in defending their position. How did they do it?
Reacting quickly pays off
At the end of May, Lidl unexpectedly announced the “biggest price cut of all time” in its German shops. 500 products were permanently reduced in price, with discounts of up to 35 %. Its competitors could not let that attack go unanswered: Aldi Nord and Süd announced permanent price cuts for hundreds of products, Edeka adjusted the prices of similar private label products, as did Rewe and Penny. Even Kaufland, Lidl’s sister company, was forced to react.
What were the consequences of that price war? Thanks to near real-time behavioural data, data specialist Accurat was able to analyse the first measurable effects after just one week. An analysis of shop visits during the week from 26 May to 1 June revealed a striking insight: Lidl’s visitor share fell slightly, from 16.4 % the week before the start of the price promotion to 16.1 % afterwards. Instead of attracting additional traffic, Lidl actually seems to have lost visitors.
The winners were mainly Aldi Nord, Aldi Süd and Edeka. By responding quickly and clearly, they strengthened their value proposition towards price-conscious consumers. For many loyal Lidl customers, Aldi was the most logical alternative, with a similar discount format and an established reputation as a price leader. In short: in a highly competitive market like the German supermarket sector, price cuts alone do not guarantee more visits. Speed, clarity and good communication are at least as important, the data company concludes.
Source: Accurat
