Walmart Lowering Grocery Prices To Prep For Battle With U.S. Newcomer Lidl

Image courtesy of (Mike Mozart)

Walmart is already engaged in a price war with one Germany-based discount supermarket chain, Aldi, and now it has to prep for competition from a second low-cost German grocer, Lidl, which is set to open its first U.S. stores this summer.

The Wall Street Journal reports that Walmart executives are prepping the retailer’s game plan for the arrival of its new competitor by working with suppliers to lower prices, expanding store-brand products, testing new checkout systems, and streamlining overall operations.

Competing with Lidl isn’t exactly new for Walmart, whose Asda stores go head-to-head against Lidl and Aldi in Europe.

However, Walmart is looking for better results stateside, as the WSJ reports that in the UK, Asda has failed to grow sales for 13 consecutive quarters, while Lidl, along with Aldi, have captured 12% of the market.

In order to stay relevant with customers in the U.S. Walmart is appealing to suppliers, asking them to keep their prices low. According to the Journal, vendors have been told that Walmart should be paying 15% less than competitors at least 80% of the time.

The demands are similar to those reportedly made by the company back in February when it launched a price comparison test at 1,200 stores in 11 states. The chain’s reported goal with these tests was to find the right price for popular items that will attract more customers and beat competitors, but still earn a profit.

The company has also previously outlined changes to its supplier logistics, asking suppliers to ship Walmart’s orders complete and on time, which would let it keep items in stock, avoid unneeded re-orders, and take in an additional $1 billion in sales, benefiting everyone.

Walmart is also trying to keep customers in stores by making their trips more convenient. CEO Doug McMillon tells the Journal the retailer is testing a checkout scan-and-go checkout system similar to one already at use in some Sam’s Club stores.

Through the test, customers are able to use their phones to scan the barcodes of products they intend to purchase and then check out on their phone as well.

Additionally, the company recently added express pharmacy and money service to its mobile app as a way to create a “faster, easier, and more convenient experience” for shoppers.

“We still have some more to address,” McMillon told the WSJ. “But we are on a path to doing so.”