Price War

Large chains have embarked on a price war. The battle is served. Mercadona chain, known for its slogan of always low prices, has restructured its linear, drawing on the same products that do not have the required rotation, even of leading brands. With that in practice, has enhanced its own brands and are a step closer to Lidl hard discount rate (with differences, however: the impeccable presentation of the shops, excellent personnel policy, in the best of the sector. ..). And has set a little lower average prices, for which, besides reducing its margin has tightened to the suppliers (the threat of withdrawal of non-linear is little).

Price wars are generally harmful to the sector that is involved in them, for causing a spiral in which all lower their margin to the extent that the weaker can not stand. While seemingly beneficial to the consumer might have side effects such as loss of jobs in the companies involved, motivated by lower profits, the same effect on the providers to “squeeze “…. A Mercadona have joined other giants of the distribution, so the battle will be intense. Although all emphasize that fall in consumer prices, as embodied in various ways: through the empowerment of private labels (Mercadona), or the creation of the same in the case of the English Court (Allied), by various promotions such as Carrefour rounded prices (up to 72% off), the anniversary of Eroski supply (up to 40%, 3×2 …).

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