A new price war has broken out between major supermarket chains in Denmark, with both Lidl and Netto cutting prices on a wide range of basic goods, in a move that experts say will significantly affect the entire food market, according to TV2.
The beginning of the price war and its widespread impact
The TV2 report confirmed that both chains reduced prices over the weekend on a large number of everyday products, at a time when food prices have been rising significantly in recent weeks.
Retail expert Dorte Wimmer of the Real Institute Scandinavia said the move represents a “battle for market share,” noting that its impact will not be limited to discount stores, but will extend to all players in the market.
She added, according to TV2, that "this will have a major impact on the entire food trade," because the rest of the chains will have to react to these reductions.
Huge discounts on basic goods
According to the report, Lidl announced on Friday morning that it was reducing prices on more than 200 essential items in all its branches.
TV2 quoted Lidl's customer affairs manager, Mette Schacht Færch, as saying that many consumers have to "spend time and effort chasing deals in order to balance their budgets," adding that the company wants to change this reality.
The reductions included products such as beef, butter, cream and cheese, with the prices of some of them dropping by more than 20 percent permanently.
Netto responds quickly and changes its strategy
The TV2 report noted that Netto chain announced almost at the same time that it was reducing prices on a number of similar goods, even though it had announced less than a week earlier its intention to raise prices due to rising operating costs resulting from the war in the Middle East and rising oil prices.
She explained this rapid shift by saying that companies “quickly step in and change their strategy to protect their market share” when such price wars break out.
For his part, Netto director Braw Bakir told TV2: “I’m not preoccupied with what Lidl is doing,” but added that the company constantly monitors competitors“ prices, and that competition is ”healthy.”.
Bakir confirmed that the new discounts have no set end date, saying that he cannot predict what will happen in the coming months, but there are currently no plans to raise prices again.
The entry of other players into the competition
The TV2 report also revealed that the Coop Group, which operates the Kvickly, SuperBrugsen and 365discount chains, also intends to launch a response within days to these discounts, indicating the possibility of a widening price war in the market.
Consumers are the biggest beneficiaries
His study, Vimer, considered these large discounts to be among the “fastest and most cost-effective ways” to attract customers, but stressed that it is not a long-term strategy to change consumer behavior.
She explained that price remains the most important factor for consumers, and that such discounts can “definitely move customers” between stores.
Morten Bruun Pedersen, chief economist at the consumer council TNK, welcomed these developments, telling TV2 that "we should be happy that competition is returning to this market," expressing his hope that more major chains will join the competition so that consumers can benefit even more.
Warnings about external factors that may affect prices
Despite the optimism, Morten Brunn Pedersen expressed caution, noting the need to actually see the price reductions on the price tags inside stores before making a final judgment.
He also noted that tensions in the Strait of Hormuz and rising oil prices could prompt retailers to reverse their discounts, saying: “We have to see how long these low prices last, there is a lot going on in the world.”.
Timing of implementation of the new prices
The TV2 report explained that the reduced prices came into effect at Netto stores on Saturday, while they were implemented at Lidl stores on Sunday, in a simultaneous move reflecting the intensity of the competition between the two chains.
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