Wal-Mart launches new front in US price war, targets Aldi in grocery aisle – CNBC

Reuters conducted the price comparisons in Dubuque and Davenport, Iowa, and Moline, Dixon and Galesburg, Illinois. At each, Reuters collected prices for a basket of 15 similar-sized products including private-label packages of butter and milk, along with branded items like Crest toothpaste and 2 liter-bottle of Coca-Cola.

In some cases, Wal-Mart’s prices were as much as 10 percent cheaper than at Aldi. Reuters found Wal-Mart’s prices were lower on at least eight and as many as 12 items in each of the five locations.

Wal-Mart is also conducting the price comparisons in Georgia, Indiana, Kansas, Kentucky, Michigan, North Carolina, South Carolina and Virginia, according to sources.

In the United States, Aldi is starting from a small base and Lidl has not yet opened its first store. Aldi, with roughly 1,600 U.S. stores, accounts for only about 1.5 percent of the U.S. grocery market — but it is growing at 15 percent a year.

Mushkin of Wolfe Research estimated Aldi and Lidl together could grab as much as seven percent of the U.S. market over five years.

Wal-Mart currently controls about 22 percent of the U.S. grocery market, and its U.S. sales are estimated to grow about 2 percent this year, according to analysts.

Over the past few years, Aldi’s prices have been about 20 percent lower than Wal-Mart’s, said Mushkin of Wolfe Research.

When Mushkin in December compared Wal-Mart and Aldi prices in Connecticut for private label goods – the retailers’ own brands, typically the lowest-priced goods in each category – he found the German chain’s prices were 24 percent lower.

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Wal-Mart launches new front in US price war, targets Aldi in grocery aisle – CNBC

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