Aldi has released a new wave of price reductions in response to competition from Morrisons.
The German discounter has a policy of maintaining a ‘price advantage of up to 38% against’ Morrisons, which recently lowered its own prices as part of the Morrisons Price Crunch Initiative. The latest reductions will be advertised as part of a new nationwide campaign, intended to discredit Morrisons’ own and draw customers back to Aldi.
“Our competitors continue to claim that they are closing the price gap,” said Aldi CEO Matthew Barnes. “We think it is important to make it clear to shoppers that any challenge to our price leadership position will not succeed.”
In recent years Aldi and fellow discounter Lidl have consistently eroded the market share held by their rivals. By offering huge discounts they have catalysed the ongoing ‘price war’ that has seen supermarkets trying as hard as they can to offer the lowest costs in the industry.
“While other retailers talk up price cuts and infuriate shoppers with misleading price-match schemes, we keep it simple with a consistent promise: whenever you visit Aldi, you’re paying the lowest prices in Britain,” Barnes continued.
According to Kantar Worldpanel, in the 12 weeks to 3 January 2016 Aldi had a 38% advantage over Morrisons in “average pack price per supermarket”. Against Tesco it enjoyed a 39%, 33% against Asda, and a gap 84% against Waitrose, which sits on the other end of the price spectrum.
As Aldi continues to discount items, Barnes drew attention to the ongoing investigation into supermarket-supplier relations, insisting that “it’s Aldi that’s funding these cuts, not our suppliers. Our model is to agree secure, long-term contracts with suppliers to ensure they are paid a fair price and have certainty.”
The chain plans to open over 80 new supermarkets in Britain in 2016, taking its overall store portfolio to over 700.