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April 22, 2005

GERMANY: Wal-Mart Germany cuts prices to attack discounters

Wal-Mart Germany has cut prices of more than a thousand articles in its stores, some of them by over 20%.

Wal-Mart Germany has cut prices of more than a thousand articles in its stores, some of them by over 20%.

CEO Kay Hafner said that the cuts were aimed at attacking the aggressive discounters, in order to build further Wal-Marts image on price and consumer trust.

A price check by the consumer organisation Verbraucherzentrale Nordrhein Westfalen in March 2005 led to media reports saying Wal-Mart was cheapest.


“It’s not just our own brands that are at or even under the price levels of the discounters,” Hafner said. “With the new prices we have also strongly reduced the branded products which the discounters don’t carry, but which the customers insist on.”

The price advantage that the discounters could offer to customers a few years ago had disappeared, Wal-Mart said. “In a typical discounter range of only 800 to 1,000 articles, whether they are own brands or branded goods, it’s no longer worth it for the consumer to shop in the so called cheap supermarkets. In Germany Wal-Mart’s own brand range alone consists of around 13,000 products, beating the discounters’ ranges by around 15 times.” Customers who wanted to buy discount and branded goods were better served by a full range like that offered by Wal-Mart with an average 60,000 lines.

The price cuts are accompanied by a nation-wide radio campaign and leaflets which are being delivered to around ten million households around the 89 Wal-Mart Supercenters. “With this first big price offensive this year we want to demonstrate our performance and convince new customers about our offer and price leadership,” Hafner said.

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