June 24, 2004

Aldi Enters Switzerland

Swiss consumers are already starting to see prices fall as the two dominant retailers prepare to fend off Aldi.

Aldi � famous in Germany and elsewhere for offering a narrow range of discounted brands � has applied to Swiss cantonal authorities for a building permit.

The chain wants to open a SFr2.1 million ($1.7 million) branch in Romanshorn, in the northeast of Switzerland.

The plan is part of a strategy to open dozens of new stores throughout Switzerland.

Industry experts believe Aldi, along with its German competitor Lidl, will need to open more than 60 discount supermarkets to break even.

For established Swiss retailers such as Migros, Coop and Denner, the threat of such newcomers has triggered a price war....

Denner, which is Switzerland�s third-largest supermarket chain, last week launched a campaign promising discounts of up to 30 per cent.

Note however, that many folks oppose Aldi because of traffic concerns:

However, many local authorities are becoming increasingly opposed to new developments that increase traffic.

�Everyone is very sensitive to traffic, so local councils are reluctant to approve Aldi-style developments,� said Wangler.

Posted by Kevin on June, 24 2004 at 01:46 PM