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Against Aldi and Lidl, personalization is the smart move | SuperMarket News

Knowing your customers and making relevant offers — not engaging in a price war — is the way for supermarkets to prevent fast-growing hard-discount grocers Aldi and Lidl from siphoning market share, according to Brick Meets Click.

Because of their private label-driven, operationally efficient business models, Aldi and Lidl can offer prices 30% to 40% below the regular price of branded groceries sold in supermarkets, noted Bill Bishop, chief architect at the Barrington, Ill.-based strategic advisory firm. Grocery retailers that cut their prices in response only end up killing their margins — an unsustainable strategy, he said.

“Supermarkets must stop lowering their prices and eroding margins in response to hard discounters. It’s a price battle they just can’t win,” Bishop explained.

Instead, he said, supermarkets can counteract Aldi and Lidl by concentrating on their strengths: serving up weekly specials — which often beat the hard discounters’ prices — and spotlighting the products and prices that individual shoppers care about the most.

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Against Aldi and Lidl, personalization is the smart move.

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