Cut-Throat: Lidl vs. Walmart, Kroger & Aldi

Axios: The German discount grocer Lidl made its United States debut this June, opening 20 stores in the Carolinas and Virginia just weeks after its compatriot Aldi announced its own expansion plans in the U.S. earlier this year … Lidl entered the market aggressively, with prices in its Winston Salem, NC, store that were 9.1% lower than the local Walmart, according to a study conducted in June by Jefferies analyst Christopher Mandeville. Given those results and Lidl’s ‘enjoyable’ shopping experience, he says Lidl could be ‘highly disruptive’ to incumbents like Walmart.”

“But the tide may be shifting, as it appears Walmart has cut the price differential to just 2%, according to a survey by Oppenheimer that looked at prices roughly a month after Jefferies visited the same locations … Oppenheimer analysts Rupesh Parikh and Erica Eiler write, ‘pricing appears dynamic and cut-throat’ at the Walmart and Lidl locations they visited in Winston Salem. ‘During our visit in the afternoon at Walmart, [a gallon of] milk was priced at $2.08. When we went back in the evening, milk dropped to $1.95. Lidl had its own deals, with a carton of eggs on offer for just 52 cents’.”

“Parikh and Eiler think that Kroger (rather than Walmart) is more threatened by German upstarts. Aldi has been in the U.S. longer than Lidl, and has big plans to become the third-largest grocer in America. But Parikh and Eiler were unimpressed, calling Lidl ‘a bigger and nicer Aldi,’ which had ‘wider aisles, enhanced lighting, and a bit more upscale feel,’ they write … No doubt the grocery shoppers of Winston Salem and other markets are enjoying the ongoing price war.”

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