News: Netherlands-based retailer Ahold has permanently reduced the prices of several products sold at its supermarket chain network Albert Heijn in an effort to attract customers who had switched to shopping at the German mass grocery retailer Lidl. The company has slashed the prices of major national brands including Lipton, Douwe Egberts and Honig. The company stated that the move is aimed at changing the price perception of products sold under the Albert Heijn banner.
BMI View: The emergence of a strong number two (in Jumbo) in a market that had been wholly dominated by Ahold for some time is likely to bring additional competitive pressure to the Netherlands' mass grocery retail sector. With Ahold and Jumbo likely to step up promotions and lower prices in a bid to attract price-conscious shoppers, the country's smaller retailers could be squeezed. In a market that looks relatively fragmented compared with its Western European neighbours, this is also likely to accelerate the pace of consolidation, with the country's smaller retailers sure to be in the spotlight of the two market leaders.