WRAL SmartShopper

WRAL SmartShopper

Study: Supermarkets near a Lidl set prices 9.3% lower on average

Posted January 16, 2018 9:23 a.m. EST
Updated July 13, 2018 9:56 a.m. EDT

Grocery stores located near Lidl stores set their prices for key staples, like milk and bread, up to 55 percent lower than in markets where a Lidl does not exist, according to a study by researchers at the University of North Carolina at Chapel Hill.

The study released last week looked at six markets that have a Lidl and six control markets where Lidl is not around. The areas were sprinkled around Virginia, North Carolina and South Carolina.

Katrijn Gielens, an associate professor of marketing at UNC, conducted the study, which was commissioned by Lidl.

The study, which looked at 48 grocery items including dairy, meats, produce and canned and frozen foods, found that competing retailers set the price for a half gallon of milk about 55 percent lower in Lidl markets compared to Lidl-free areas. Overall, the study found retailers in Lidl markets set their prices about 9.3 percent lower than in markets without the German grocery chain.

“We know that supermarket chains systematically compete with each other on price. The level of competitive pressure Lidl is exerting on leading retailers to drop their prices in these markets is unprecedented,” said Gielens. “In fact, the competitive price-cutting effect of Lidl’s entry in a market is more than three times stronger than the effect of Walmart’s entry in a new market reported by previous academic work.”

The study found:

– Aldi sets its prices up to 19 percent lower in markets where Lidl operates compared to where it is not present

– Food Lion and Kroger set their prices up to 15 percent and up to 13 percent lower, respectively, compared to where it is not present

– Walmart and Publix set their prices up to 4 percent lower