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Aldi, Lidl, Penny – The big discounts in Germany are under pressure

Costs are rising, sales are weakening: is Germany cheaper? Market Explorer Market Forecasts by Ascential suggest that.

Munich – For a long time it seemed that there was only one way for the German discontinuers. And that meant growth, growth, growth. With a low-priced strategy, they set standards in food retailing.

It seems now that Aldi, Lidl and Co. weaken. This gives at least one article Handelsblatt close. The business document has an exclusive forecast by Market Explorer Edge by Ascential, which assumes that Aldi, Lidl, Penny and Co. in Germany it will grow by 1.9 percent in 2019. In comparison, self-employed traders in Rewe increased their sales by 9.1 percent last year.

Similar conclusions have also been drawn from the Gesellschaft für Konsumforschung: For example, the sale of supermarket chains like Rewe and Edeka in 2018 grew at least twice as fast as discount sales. The market share of discount stores is declining.

Aldi, Lidl, and Penny under pressure: That's the reason

The reason for the decline in sales is the new buying habits. Customers did not pay so much attention to the price, the shopping experience would be in the forefront. And the discontinuers had little to offer for long.

Although Aldi Nord and Aldi Süd have recently attempted to gain a new business concept among consumers. However, large investments in modernization measures do not seem to have the desired effect. "Discounters are in a dilemma: those who do not join will lose their market share," says Boris Planner, chief economist at Research Researcher Edge by Ascential Handelsblatt"At the same time, upgrading affiliates causes high costs that are difficult to recover with low margins."

In addition, the rising cost of developing new customer groups, for example, by incorporating organic or vegan products and convenience foods (ready-made salads, smoothies or sandwiches) within reach. Which also increased internal structures. Either way, nervousness is spreading: within six months Aldi Nord and Aldi Süd and Lidl have announced the exchange of workers at the top.

Crisis crisis: Aldi, Lidl and Penny are looking for a new strategy

The shocks in the Aldi Nord industry are particularly serious. For the first time in 2018, the company suffered a loss on the German market. Aldi Nord 2019 is predicted to even lose sales. Last year Aldi Nord had to record a loss in this country for the first time.

Therefore, sister companies of Aldi want to attract more customers to their branches not only with more and more branded products on their shelves. Aldi Nord and Aldi Süd also adapted their purchasing strategy. And he joined here to keep up the eternal mutual subcutaneous struggle of discount. Purchasing departments should not be fully merged. But so entangled that food manufacturers usually have only one contact person for each product.

Also read: Philipp Lahm and Aldi: Former Star FC Bayern soon promotes discount store

Due to the larger purchase quantities, both companies are hoping for better prices. Aldi Nord and Aldi Süd recently launched joint TV commercials. The reorientation was primarily conditioned: "Our structure is no longer lean", he quotes Handelsblatt Senior Manager of Aldi Nord. However, this assessment covers the whole sector. "Amazon is today closer to the idea of ​​discounting Carl and Theo Albrecht than Aldi."

Video: How Lidl wants to leave the competition behind

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