Discounter builds on fears about euro changeover Rivals move to match Aldi's price cut drive Supermarkets in Germany have slashed prices on a raft of goods after Aldi threw down the gauntlet with a wave of price cuts in the new year. In an unprecedented move for the usually publicity shy hard discounter, Aldi launched an aggressive ad campaign in every leading national and regional newspaper to announce cuts of 2%-3% on all goods except tobacco. It is making similar cuts in stores in the Netherlands, France and Austria. The campaign features the slogan You can count on us, even in the euro', calming fears the changeover to the single currency would result in a wave of stealthy price increases as retailers rounded prices up. Instead, Aldi rounded down when converting marks to euros in cuts that analysts estimate cost several hundred million euros. Metro immediately followed suit by matching Aldi on all its value lines in its Real and Extra hypermarkets; Tengelmann slashed prices on 800 lines in its Plus discount stores; and Lidl, Rewe and Norma also announced a series of reductions. Wal-Mart said it was sticking to its Rollback campaign. Given the wafer thin margins in German food retail, some analysts said a further escalation of the price war would be unsustainable. Schroder Salomon Smith Barney analyst Matthias Reschke said that while Metro's cuts would hit its bottom line, its own label participation was relatively small in comparison to Aldi ­ which only sells private label ­ and would have a more limited impact. "It was obvious something like this was going to happen. Price competition in Germany has been weaker towards the end of the year as manufacturers pushed through price increases, and retailers are anxious not to be seen to be profiting from the euro changeover." {{NEWS }}

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