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Prices at Aldi and Lidl rise faster than the competition

German discounters are known as the kings of 'always low prices'. However, in recent months prices have risen in cheaper supermarkets such as Aldi and Lidl faster than in the traditional supermarkets, according to a study by the German association for consumer research GfK. Industry experts say: "When we look at the development of discounters in recent years, we can no longer talk about budget prices."
 
In August customers of discounters paid 4% more than in the same month last year. Compared to prices from traditional supermarkets they were only 1.6% more expensive. There are many reasons for this. The increased raw material prices have worked through to supermarket prices, and also there are a growing range of branded goods, organic products, and regional products at the discounters; these products are usually more expensive. Last but not least, the discounters have inflated the prices, so judges the GfK trade expert Robert Kecskes. Since March this year, prices by the discounters rose substantially compared to traditional supermarkets.
 
The times when discounters are in a bitter price war with each other and with the traditional supermarket chains are over. There are a number of reasons for this, says Matthias Queck from research bureau Planet Retail. "On the one side traditional supermarkets realise that they cannot win a battle with discount supermarkets so they focus on freshness and service to distinguish themselves. On the other side the discounters are not interested in further price reduction, they urgently need the money for modernisation of branches in their own land and expansion abroad."
 
Long term the price increase has not appeared to harm the discounters. In the first seven months of this year profits for Aldi and Lidl rose by 4.6%, while sales in traditional supermarkets rose by only 3.2%. The question arises whether or not the discounters are at the point of going too far. In August for the first time in a long time classic supermarkets achieved higher sales growth than discounters. Consumers have noticed the price difference between discounters and classic supermarkets has fallen, so thinks GfK expert Kecskes. "We don't yet know if the discounters are just out of breath, or if they have fallen to the ground."
 

 

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