Aldi engages in price war with British supermarket chains

“Aldi Price Match” – supermarkets in Great Britain are trying to stop the triumph of the German discounters with price campaigns. But are they also helping the competition?

London (dpa) – The discounter Aldi continues to engage in a fierce price war with the established chains in Great Britain. As Aldi UK announced, the German food discounter achieved record sales of 17.9 billion pounds (about 21.2 billion euros) last year – an increase of 16 percent compared to 2022. Profits before taxes even rose from 152.6 million to 536.7 million pounds.

This year, however, Aldi’s triumph has slowed somewhat. At times, its market share has even fallen slightly. According to experts, this is also due to the fact that long-established British supermarket chains such as Tesco, Sainsbury’s, Asda and Morrisons have introduced so-called “Aldi Price Match” offers. Products are advertised as being available at the same price as at Aldi.

Prices are expected to continue to fall

Aldi’s managing director for Great Britain and Ireland, Giles Hurley, announced that he would be making investments and would also continue to reduce prices. He was “quite optimistic” that there would be further price cuts before Christmas, he told the British news agency PA.

Retail expert Stephan Rüschen does not think it is clever that British supermarket chains attach signs with the words “Aldi Price Match” to the relevant shelves. “This attests to Aldi’s particularly prominent position.” Aldi does indeed have this position as the price leader, but there is no need to support this in terms of communication.”

Great Britain is the world’s third most important market

In Germany, such signs cannot be found, said the professor of food retail at the Baden-Württemberg Cooperative State University in Heilbronn. In fact, however, there is also a price focus on Aldi. All retailers align their entry-level items with Aldi and adjust the price weekly to the Aldi price. This is even the case for branded products such as Nutella in the fall.

In its communication with customers, German retailers prefer to point out the large number of discount items. “This is intended to promise that you can save yourself the trip to the discounter,” says the expert.

According to the EHI Retail Institute, Great Britain is the third most important market for Aldi worldwide, after Germany and the USA. The discounter now has a market share of ten percent, making it the third-largest supermarket on the island. The current Lidl is hot on its heels with a good eight percent.

topicnews · September 11, 2024

Aldi engages in price war with British supermarket chains – Economy

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