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Aldi, Lidl, Penny – Big discount companies in Germany are under pressure



Costs increase, sales weaken: threatened Germany in the dawn of discount? The predictions of market researcher Edge by Ascential suggest that.

Munich – For a long time there seemed to be only one way for German rebates. And that meant growth, growth, and growth. Through a difficult strategy of low price, they set the standards in the food retail.

But now Aldi, Lidl and Co. seem to be weakening. This puts at least one article from the Handelsblatt close. The business document has exclusive forecasts from market research firm Edge by Ascential, which assumes that Aldi, Lidl, Penny and Co. sales in Germany will grow by 1.9% in 2019. By comparison, Rewe freelancers have increased its sales at 9.1% last year.

A study by the Gesellschaft für Konsumforschung also reaches similar conclusions: for example, sales of supermarket chains such as Rewe and Edeka in 2018 increased on average at least twice as fast as discounters. The market share of discount stores is declining.

Aldi, Lidl and Penny under pressure: these are the reasons

The reason for the drop in sales is the new buying habits. Customers did not pay much attention to price, the buying experience would be in the foreground. And the discounters had little to offer for a long time.

Although Aldi Nord and Aldi Süd recently tried to brand with a new store concept among consumers. However, extensive investments for modernization measures do not seem to have the desired effect. "Discount companies are in a dilemma: those who do not participate in modernization will lose market share," says Boris Planner, chief economist at market research firm Edge by Ascential. Handelsblatt, "At the same time, upgrading agencies leads to high costs, which are difficult to recover with low margins."

In addition, increasing costs for the development of new customer groups, for example, by including organic or vegan products and convenience foods (ready-made salads, smoothies or sandwiches) in the range. That also increased the internal structures. Anyway, the nervousness is spreading: in half a year, both Aldi Nord and Aldi Süd and Lidl announced the exchange of personnel at the top.

Crisis of discounts: Aldi, Lidl and Penny in search of a new strategy

The buzz in the Aldi Nord industry is particularly severe. For the first time in 2018, the company suffered a loss in the German market. According to forecasts, the Aldi Nord 2019 is even losing sales a little. Last year, Aldi Nord had to register a loss in this country for the first time.

Therefore, Aldi's sister companies want to attract more customers to their subsidiaries, not just more and more branded products on their shelves. Aldi Nord and Aldi Süd have also adapted their purchasing strategy. And joined here to accompany the eternal mutual struggle of rebates from discount companies. Purchasing departments should not be fully merged. But so intertwined that food manufacturers usually only have one contact person for each product.

Read too: Philipp Lahm and Aldi: Bayern's former star promotes discount store

Due to the greater quantities of purchases, the two companies are waiting for better prices. Aldi Nord and Aldi Süd have recently launched TV commercials. The reorientation was mainly conditioned internally: "Our structure is not thinner", Handelsblatt a top manager at Aldi Nord. But this assessment applies to the entire industry. "Amazon is closer today to the idea of ​​discount from Karl and Theo Albrecht than Aldi."

Video: How Lidl wants to leave the competition behind

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