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Why Aldi, Lidl & Co. are currently cutting prices so aggressively

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The supermarket chains Aldi, Lidl, Netto and Kaufland fight with all their might against an expected recession – and advertise with special discount campaigns, seals and cheap prices. In particular, price entry in retail is coming back into focus due to the recession.

According to the largest German market research institute GfK, the full-range retailers benefited from the crisis with an increase in income of 18.1 percent until the end of April. In contrast, the discounters weakened with an increase of only 12.7 percent.

Discounters are now hoping for customer growth through advertising for particularly low prices. According to insiders, this is the main reason why discounters are now increasingly turning to cheap prices and at the same time trying to achieve better conditions in purchasing. “The discounters are preparing for the crisis and are expecting customers to be more price sensitive,” says an experienced retail professional, according to the food newspaper. He expects this to remain the case in the coming months. For example, Aldi and Lidl are advertising more with price reductions, although various articles have recently become more expensive due to the raw materials.

The discounters also hope to use various methods to strengthen price confidence among buyers. Numerous price seals are intended to attract customers. Among other things, Lidl presents itself as a “price-performance winner” and underpins this with a corresponding study. Aldi tests so-called trial prices for private label items.

Schwarz Group remains at the top in the crisis

The largest retail group in Europe, the Schwarz Group, was able to generate particularly profitable months with its discounters Lidl and Kaufland. They had achieved their goal of building customer confidence in the crisis, the food newspaper said. Now it is important to keep them in the economic downturn. Both sister companies show that there are very different ways to recommend yourself as an inexpensive shopping center to customers.

Kaufland has been successfully marketing branded goods in particular more aggressively than any other competitor for months, including its own discounter sister Lidl.

Problem child net

The brand discounter Netto plays a special role. The sharper promotional prices in the market are explained by the fact that the Edeka discounter is currently weaker compared to the top discounters. Now it is important to keep in touch with the top discounters, reports the food newspaper. Netto works with everything that marketing has to offer. Discounts for single days, blockbuster of the week, highlight of the week and even flat-rate discounts for articles from one manufacturer. The new net app should also help to stimulate business.

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