In a move that is believed to aggravate the on going supermarket price rivalry, the German discounter chain Aldi has decided to cut the prices of its sixty products. Lately, there were reports that the big supermarkets were trying to mimic the discounters with bogo deals and offers and thus luring in shoppers to spend more than they intend to. This brought in severe criticism and forcing Sainsbury’s to announce scraping the bogo offers.
It is at this time that Aldi has came up with fresh price reductions. Aldi’s Chief executive office Matthew Barnes lashed out at ‘smoke and mirrors’ multi buy deals introduced by other supermarkets. The discounter has announced that the new cut will affect 4 percentage of the total products in its stores. Supermarkets Asda and Morriosns had announced similar price custs recently. Matthew Barnes asserted that no one can ever beat the discounter on the price factor. He said that factor ‘is cast in stone’.
Analysts sees the new price cut tactics from Aldi as a retaliation to the Sainsbury’s move to open Netto stores in North England joining hands with the Danish group. Alid had plans to increase the number of its supermarket stores in UK to 700. But the fall of pre-tax profit in 2015 to £10.1m might force the discounter to scrap its decision.