Aldi, Lidl, and Others: Who's Kicking Butt in the German Discount Store Battle?
Competitors vying for dominance in the discount retail sector - Competitive discount struggles for dominant market position
Let's chat about the intense competition heating up among Germany's favorite budget stores. Aldi and Lidl have been dropping prices like hot potatoes, and it's creating quite the spectacle. According to new data from YouGov (via the German Press Agency), discount stores raked in around 77 billion euros in 2024, a hefty 33% increase from five years ago.
You might be wondering, who else is in the race for budget shopping domination? Besides Aldi and Lidl, you've got Penny, Netto, and Norma. Believe it or not, these little guys have been growing at a faster rate than the entire market. The food retail sector grew by a whopping 26.6% between 2019 and 2024, reaching approximately 203 billion euros. Even big-time supermarkets like Edeka and Rewe have been growing at a similar rate over the same period.
During these turbulent times (we're looking at you, COVID-19 and Ukraine crisis), both Aldi and Lidl have been securing their spots in the market. In fact, discount stores now account for around 38% of the market, with full-range supermarkets following closely at nearly 29%. But don't count out the self-service stores like Kaufland, Marktkauf, and Globus, or specialized stores just yet – they've been losing market share.
The battle for budget shoppers is, without a doubt, fiercer than ever. Supermarkets and consumer stores made gains at the start of the pandemic, but Robert Kecskes, YouGov expert, tells us that there was a shift towards discount stores in 2022 and 2023. With inflation shooting up due to the war, food prices have gone through the roof.
Well, the shift has stopped, and discount stores are no longer the automatic winners. Full-range supermarkets are fighting back. "Not only is the battle between distribution channels becoming more intense, but the fight for market share among discount stores is also escalating," Kecskes warns.
It's all about pennies and cents for our favorite germans stores. Lidl announced the "biggest price reduction in its history" and chopped prices on over 500 items across almost all product categories. Savings for customers can reach up to 35%, depending on the region, without revealing specifics.
Aldi wasn't about to let Lidl snatch the thrifty shopper crown (or schnalle, as they say in Germany). The store has already permanently lowered prices on around 1,000 items, with hundreds more about to follow in the coming weeks. Customers looking for bargains can expect to see lower prices on dairy products, meat, sweets, frozen foods, and cleaning products. "Being the price leader isn't just a short-term tactic for us. It's a fundamental principle," Aldi boasts.
The discount store wars have spread to other retailers who can't resist jumping on the price-cut bandwagon. With food prices up 36.5% in May compared to the 2020 average (according to the Federal Statistical Office), it looks like these price cuts won't be short-lived. Stephan Rüschen, a retail expert from Baden-Württemberg Cooperative State University, predicts these cuts will stick. After all, people are watching.
Rumor has it that Lidl's price drop is more than just a temporary move – they're trying to overthrow Aldi's price leadership and grab market share. Lidl seems to be on the rise and is inching closer to matching Aldi's sales figures.
Stay tuned for more updates on this thrilling budget showdown!
- ALDI
- Lidl
- Discount Stores
- Market Leadership
- Germany
- Robert Kecskes
- YouGov
- Lidl
- Sustainability
- Netto
- Norma
- EDEKA
- Rewe
- Coronavirus
- Ukraine
- Kaufland
- Marktkauf
- Amidst the growing competition among budget stores in Germany, including Aldi and Lidl, other retailers like Penny, Netto, and Norma are also growing at a faster rate than the entire market, particularly in the food retail sector.
- As the market share of discount stores continues to expand, industry experts predict that price cuts from stores such as Aldi and Lidl will not be temporary, as they strive for market leadership, driven by factors such as inflation and consumer watching.
