Skip to content
Business — Retail — Industry — Other — Finance

Discounts are in fierce competition for dominance in the marketplace.

Cutthroat competition intensifies between German discount stores, Lidl and Aldi, as they slash prices to draw in shoppers. The latest statistics reveal a tougher battlefield, but who's in the lead in this price war?

,   and  Administrator
3 min read
Cutthroat competition among German discount retailers: Lidl and Aldi are escalating their rivalry...
Cutthroat competition among German discount retailers: Lidl and Aldi are escalating their rivalry by slashing prices to attract consumers. The competitive landscape is growing tougher, according to recent data, but who's in the lead?

Discounts are in fierce competition for dominance in the marketplace.

In the heart of Europe, discount stores rule the roost, with German heavyweights Aldi and Lidl leading the charge. These no-frills, budget-friendly retailers have seen a meteoric rise in popularity, leaving traditional supermarkets like Edeka and Rewe in their wake. According to recent data from market research firm YouGov, in 2024, the combined sales of all discount stores soared to around 77 billion euros - a whopping 33% increase over five years.

As for the broader food retail sector, it experienced a substantial 26.6% growth between 2019 and 2024, reaching approximately 203 billion euros. Discount stores, including Aldi, Lidl, Penny, Netto, and Norma, accounted for the lion's share of this growth, outpacing the overall market. Concurrently, other sectors like self-service stores and specialized stores lost ground.

The COVID-19 pandemic and the Russian invasion of Ukraine presented unique challenges but also opportunities for these discount powerhouses. During the initial stages of the pandemic, supermarkets and consumer stores gained market share as vacations, dining out, and other leisure activities were put on hold, and many people had extra cash to spend. However, in 2022 and 2023, shoppers began flocking to discount stores due to inflation-driven food price increases. This trend has since stabilized, but full-range stores are fighting back, closing the gap.

The intense rivalry between Aldi and Lidl has escalated in recent days as they engage in a fierce price war. In response to Lidl's announcement of its "biggest price cut ever," reducing prices on over 500 items across various product categories by up to 35%, Aldi countered by announcing permanent price reductions on nearly 1,000 items and plans to add hundreds more in the coming weeks, across dairy, meat, frozen food, sweets, and cleaning products.

According to Robert Kecskes of YouGov, "these price battles between distribution channels intensify competition and sharpen the battle for market share among discount stores." This cutthroat competition is particularly pronounced between Aldi and Lidl, the two largest players in the German discount retail sector.

It's worth noting that both Aldi and Lidl are Germans-origin, family-owned discount supermarket chains with a long history of dominance in the German discount market. Their competition is characterized by aggressive pricing, efficient supply chains, and rapid expansion strategies. According to Euromonitor, Germany remains one of the largest and most mature discount markets globally, with Aldi and Lidl being the top performers.

By permanently lowering prices on essential items, discount stores aim to attract price-conscious consumers. However, these discounted prices are part of a larger strategy; cheap offerings draw in new customers who may also purchase items with a higher profit margin. Stephan Rüschen, a retail expert from the Baden-Württemberg Cooperative State University, believes that the price cuts will be permanent, as retailers risk losing credibility if they secretly raise prices again after a few weeks.

So, brace yourselves, folks! The competition between Aldi and Lidl is heating up, and it seems like shoppers are the real winners in this game of thrones.

[1] Perspectives Market Research, "Germany Discount Supermarkets Market Report 2021: Opportunities and Offerings," Link

[2] Euromonitor International, "Germany Retail Sector Overview, Discount Stores," Link

[3] Statista, "Market share held by selected discount grocery stores in Germany as of August 2020," Link

[4] Reuters, "Aldi plans big push into US as grocery wars heat up," Link

  1. The competition between discount stores, particularly Aldi and Lidl, is intensifying in the financial sector, as both retailers engage in aggressive price wars to attract price-conscious consumers in the retail industry.
  2. Despite the challenges posed by the COVID-19 pandemic and the Russian invasion of Ukraine, other sectors like self-service stores and specialized stores have been losing ground to discount stores, including Aldi and Lidl, in the broader food retail business.

Read also:

    Related

    Latest