Aldi is known for its reliably low grocery prices. In the United States, its store-brand Regular Buy products have fairly fixed prices, occasionally getting discounted by 10 to 20 cents but otherwise not changing much. That is changing in Aldi stores in Germany.
German-based Aldi will raise prices on some of its a “A-brand” or store-brand products so that it can run limited-time promotions on them, but this change is happening only at its stores in Germany, according to RetailDetail, which reports on retail news in Europe. Starting in 2019, Aldi Nord and Aldi Süd began offering temporary discounts on certain A-brand products.
RetailDetail reports that this change comes as Aldi faces increasing competition from Lidl, which offers discounts on its store-brand products. Lidl and another German supermarket chain, Rewe, have responded by offering more discounts, thus leading to lower profit margins and reduced revenue from the promotions.
According to Lebensmittel Zeitung, a German weekly newspaper for executives in the food industry, Aldi is raising the fixed prices on its store-brand products so it will have margin to offer promotions. In some cases, the regular Aldi prices are now the same as competitors’ prices.
RetailDetail reports that, as an example, the price for a box of Langnese Cremissimo ice cream (produced by Unilever) has been increased to 3.29 euros, but it will be discounted during temporary promotions to between 1.85 and 1.99 euros.
It’s uncertain how customers will react to the price increases and whether Aldi will ultimately benefit from this change. RetailDetail reports that German media coverage has focused on how Aldi has recently become more expensive. After negative reactions in the press and on social media, other Aldi branches, such as in Belgium, have stated that the price increases on Aldi-brand products are only in Aldi stores in Germany. In other countries, Aldi’s price strategy has not changed.
Source: Retail Detail