Lidl, Aldi at price parity, study shows
Walmart, Kroger beaten at the shelf but closer on fresh
Prices at Lidl’s stores during its opening week were running between 5.7% to 10% cheaper than neighboring Wal-Mart Stores, nearly 15% lower than Kroger stores but nearly at parity with Aldi, a pricing study conducted by Deutsche Bank showed.
Analysts from the bank conducted the study at three of the 10 Lidl stores that opened earlier this month in Greenville, Sanford and Raleigh, N.C., along with nearby competitors in those markets.
The study confirmed that Lidl’s arrival represents an incremental price threat — but not necessarily a new one — to traditional grocery sellers that have been defending against Lidl’s hard-discounting counterpart Aldi for some time, and showed Lidl’s price advantage was generally greater in center store items than in fresh. It would also suggest Aldi and Lidl are keeping a close eye on one another and could compete for many of the same shoppers in the markets Lidl enters.
“Lidl’s entry and continued expansion … will be a challenge for existing competitors, but the offering may not prove to be as disruptive as some fear given that hard discounters have been in the U.S. for many years and have not resonated with U.S. consumers in the same way as with European consumers,” the report, authored by analysts Paul Trussell and Shane Higgins, said. “Most of the disruption will likely be around the grand openings, as curious shoppers line up to see the new stores, pulling traffic from competitors.”
Deutsche Bank’s basket studies revealed the following results:
• In Greenville, Lidl was 10% cheaper than a Walmart Neighborhood Market on a basket of 46 items ($70.61 vs. $78.48), with Lidl having a lower price on 41 of the 46 items. The differences were narrower on fresh items, where Lidl showed 8.5% advantage on price.
• The same Lidl store in Greenville was priced nearly at parity with a neighboring Aldi, with a total basket of 44 items being $68.75 at Lidl, 0.7% higher than the $68.28 price at Aldi. Within fresh items, Lidl held a 0.5% advantage. Analysts noted that three items in the study at Aldi had temporary markdowns that accounted for the entire difference between them.
• In Sanford, Lidl beat a Walmart Supercenter by 5.7% overall and by 8.1% when excluding national brands on a basket of 53 items. Lidl’s advantage was far less when limited to dairy items, with only a 1% price edge achieved on 8-ounce cheeses ($1.69 vs. $1.74), while milk (skim, whole and 1% gallons) and Grade A Large eggs were at identical prices ($2.78 and $1.18, respectively).
• In Raleigh, a basket of 40 items at Lidl cost $63.17 — or 14.6% cheaper than a $74 basket of the same items at Kroger. As in the Supercenter study, Lidl’s price advantage in fresh items was considerably narrower (1.1%), with Kroger offering lower prices on milk ($2.39 at Kroger for 1-gallon skim, whole and 1% milk vs. $2.75 at Lidl), the study found.
Analysts from the bank conducted the study at three of the 10 Lidl stores that opened earlier this month in Greenville, Sanford and Raleigh, N.C., along with nearby competitors in those markets.
The study confirmed that Lidl’s arrival represents an incremental price threat — but not necessarily a new one — to traditional grocery sellers that have been defending against Lidl’s hard-discounting counterpart Aldi for some time, and showed Lidl’s price advantage was generally greater in center store items than in fresh. It would also suggest Aldi and Lidl are keeping a close eye on one another and could compete for many of the same shoppers in the markets Lidl enters.
“Lidl’s entry and continued expansion … will be a challenge for existing competitors, but the offering may not prove to be as disruptive as some fear given that hard discounters have been in the U.S. for many years and have not resonated with U.S. consumers in the same way as with European consumers,” the report, authored by analysts Paul Trussell and Shane Higgins, said. “Most of the disruption will likely be around the grand openings, as curious shoppers line up to see the new stores, pulling traffic from competitors.”
Deutsche Bank’s basket studies revealed the following results:
• In Greenville, Lidl was 10% cheaper than a Walmart Neighborhood Market on a basket of 46 items ($70.61 vs. $78.48), with Lidl having a lower price on 41 of the 46 items. The differences were narrower on fresh items, where Lidl showed 8.5% advantage on price.
• The same Lidl store in Greenville was priced nearly at parity with a neighboring Aldi, with a total basket of 44 items being $68.75 at Lidl, 0.7% higher than the $68.28 price at Aldi. Within fresh items, Lidl held a 0.5% advantage. Analysts noted that three items in the study at Aldi had temporary markdowns that accounted for the entire difference between them.
• In Sanford, Lidl beat a Walmart Supercenter by 5.7% overall and by 8.1% when excluding national brands on a basket of 53 items. Lidl’s advantage was far less when limited to dairy items, with only a 1% price edge achieved on 8-ounce cheeses ($1.69 vs. $1.74), while milk (skim, whole and 1% gallons) and Grade A Large eggs were at identical prices ($2.78 and $1.18, respectively).
• In Raleigh, a basket of 40 items at Lidl cost $63.17 — or 14.6% cheaper than a $74 basket of the same items at Kroger. As in the Supercenter study, Lidl’s price advantage in fresh items was considerably narrower (1.1%), with Kroger offering lower prices on milk ($2.39 at Kroger for 1-gallon skim, whole and 1% milk vs. $2.75 at Lidl), the study found.
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