Walmart Targets Aldi

Daniela Leandro

 

Walmart launches new front in US price war, targets Aldi in grocery aisle (CNBC.com)

Walmart is running a price-comparison test in 1,200 stores all over the United States. They are doing this in hopes of gaining more customers from the Aldi’s fan base. Walmart is trying to come close to closing the price gap between their prices and Aldi’s much more affordable prices. The test was launched in Iowa, Illinois, Florida, and many more Midwest and Southeastern states. The main goal is not only to close that price gap, but to find the right prices for their variety of products to attract more customers, and if the price does not attract customers than to adjust the prices as they go on. These shows a new price war between supermarkets in the United States. This is because the customers are going to keep shopping at these supermarkets if they keep their prices low, or much lower than the competitor. However, Walmart has to be attentive to their prices drops because it dropped 18 percent in net worth in 2016. Walmart controls about 22 percent of the U.S grocery market, and is expected to increase sales by 2 percent this year. Aldi’s on the other hand, only controls about 1.5 percent of the U.S grocery market, but it is expected to grow 15 percent each year, as it has for the past two years.

This article is related to the concept of competition, and the idea of a price gap between both companies. It is a perfect competition which is market structure characterized by a large number of well-informed independent buyers and sellers dealing with identical products. Walmart is trying to beat the prices of Aldi’s identical products, and trying to attract as many buyers as possible. Another concept was the idea of a price gap. A price gap is the empty vast between the prices of Walmart and Aldi’s.

Walmart wants there to be no gap, so that the customers can choose their products and prices.  If Walmart is fighting to close this gap there will be a major decrease in prices. This would help me and my family, as well as others around me because we all constantly shop at Walmart. That is because it is the nearest supermarket and it is more convenient to go to. This means we can budget wiser, and save more money rather than having to drive farther and spend more money in gas just to save money while grocery shopping.

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