Sales slump in organic milk - Aldi is struggling with the consequences of the price experiment
Created: 12/22/2022, 3:16 p.m
By: Jannis Gogolin
The discounter Aldi is actually known for its rock-bottom prices.
But he got himself into big trouble with his price for organic milk.
Munich – In times of astronomical food prices, weekly shopping is a growing burden for private households.
As the cost of staples like vegetables, bread and milk continues to rise, cheap discount-store products are gaining in popularity.
Not so at Aldi.
After a price increase for organic milk in the middle of the year, sales collapsed by 30 percent.
For the grocer - actually known for its rock-bottom prices - a disaster.
Milk price at Aldi: price increase causes demand to collapse - further increases possible
In the middle of the year, the hard discounter Aldi increased the price for its pasteurized organic milk from EUR 1.15 to EUR 1.69 – an increase of almost 50 percent.
While many competitors followed suit, the strange price strategy fell back on Aldi, according to the LZ.
Because the company's orientation actually aims to be the price leader in staple foods.
And at the same time, the competition offered a liter of milk unchanged for 1.29 euros.
As a result, customers were reluctant to reach for the shelves.
30 percent less organic milk crossed the checkout line.
Although the grocers made adjustments and lowered the price to 1.35 euros in the meantime, they were only able to make up 10 percent of the loss.
And because of the weak demand, according to LZ, there is now a renewed price increase in the room.
It is unlikely that this will bring redemption from the low demand.
Market experts surprised by Aldi's strategy - little understanding of high milk prices
In addition, experts are surprised why Aldi even started such a price experiment.
As Bioland President Jan Plagge explained to the LZ, the increase could not be due to the increased production costs.
Because the organic dairy farmers were comparatively spared from cost explosions.
The cost of producing organic raw milk has increased by only three cents.
And there is no shortage of organic milk.
According to experts, however, this should not be understood as a signal for falling demand for organic products.
Organic food is still in demand.
Nevertheless, for some retailers there are severe consequences in all areas of life because of the price increase.
The organic market chain Basic, which opened its first store in Munich in 1998, recently declared bankruptcy and applied for a rescue package.
