Discount Retail Chains Aldi and Lidl Germany are currently outbidding each other when it comes to lowering the price of basic items to the delight of consumers. After the prices for fruit, vegetables, cheese and butter have already fallen, pasta is now hit.
Inflation and a shortage of raw materials fuelled the ongoing upward spiral in supermarket prices, according to data from the Federal Statistical Office, food prices have risen by around 20 percent compared to the previous year.
The inflation rate is increasingly weakening. Aldi, Lidl and Kaufland (both owned by the German Schwarz Group) simultaneously lowered the prices of their own private label brands from May 8th from to 99 cents to 79 cents.
As the Lebensmittelzeitung reports, cheese suddenly became cheap at Lidl and Kaufland at the end of April. One crucial difference: Lidl and Kaufland, both trading subsidiaries of the Schwarz Group, went it alone and reduced the prices of selected cheese products by around 18 percent. Aldi did not follow suit until days later. But the tide should turn with the next price reductions: Not only the pasta in the cheapest price segment became cheaper, Aldi also reduced the spaghetti price of its own organic brand "Gut Bio" by 36 percent.
Lidl and Kaufland (both sourcing parts of their pasta assortment directly from the Schwarz Production GmbH owned vertically integrated German based pasta factories) justified the price reductions with the recovered raw material prices. In addition, there are signs of a price war between discounters and their direct competitor Aldi. This recently fuelled the competition for price leadership with the introduction of a new, low-cost own brand. The large supermarket chains à la Edeka and Co. could also come under pressure from falling discounter prices.
In addition to supermarket rivals, such price reductions are also causing problems for farmers and farmers. The German broadcaster MDR reported that dairy farmers in particular are angry about the benefits. Among other things, rising energy prices are currently causing production costs to skyrocket, but prices in supermarkets are falling. While farmers received 60 cents per litre of milk last November, it was only about 45 cents in March, according to MDR.
