A fresh supermarket price war between Aldi and Lidl has been predicted by one of Spain’s major retail market research analysts.

Florencio Garcia from Kantar España believes that increased demand from consumers will see further price reductions over the next few weeks.

Garcia said: “Price cutting between Aldi and Lidl is inevitable but shoppers also want quality, and rivals to chains like Mercadona have learnt lessons from the past where they simply wanted to copy the success of the Spanish supermarket giant”.

The country’s traditional top three of Mercadona, Carrefour and Dia all lost market share in 2020, with Lidl breaking in to overhaul Dia in terms of sales.

The threat from Aldi and Lidl has seen Carrefour and Dia both enter a price war via special promotions and loyalty cards, but Mercadona has held back from joining in the fray.

“Mercadona is still the number one retailer with a market share of 24.5% in 2020, which was a 1.1% fall on the previous year,” Garcia commented.

“The chain has to reinforce online sales and also tempt previous customers who have shopped around during the pandemic and not returned.”

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Florencio Garcia believes that Mercadona will not enter a new price battle but will focus on its big programme of store expansion across Spain and developing its takeaway food sections.

“Despite the obvious loss of customers by Mercadona and other traditional names, it is typical of what has happened in other countries, especially if people have not been able to travel to their regular outlet.”

“We should not lose sight of the fact that Mercadona has a very strong market lead, and even though rivals like Carrefour and Dia have also seen percentage falls, all of them have seen their income rise as supermarket spending rose by nearly 13% last year,” added Garcia.

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