Price cuts of 23% in Aldi kick off new year supermarket wars

The cuts come to items such as crumbed lean ham, sliced chicken and turkey, yoghurts and kids' smoothies, Aldi said. Picture: iStock

Supermarket chain Aldi has ramped up the pressure on its competitors, as it announced a range of price cuts of up to 23% on its most popular products.

The retailer said a typical trolley of groceries currently costing about €121 would now reduce to €106, after the reductions.

The move from Aldi early in the new year will lead the other major supermarkets to follow suit, and bring in their own reductions to keep pace with their rivals.

The cuts come to items such as crumbed lean ham, sliced chicken and turkey, yoghurts and kids' smoothies, Aldi said.

Other items with price reductions include protein puddings and mousses, Irish lean beef burgers, free range chicken fillets and Greek yoghurts.

The announcement just a few days into the new year should heat up the supermarket price wars that began in earnest last year as households continued to face soaring prices for their weekly shop.

There had been claims supermarkets had been “price gouging” its customers as costs began to shoot up following Russia’s invasion of Ukraine. Retail Minister Neale Richmond said, following a meeting last May, that he had received assurances from retailers they would pass on the benefit to customers when their input costs reduce.

The Consumer and Competition Protection Commission conducted its own probe, and said there was no indication supermarkets were engaged in price gouging.

It said the issue of higher grocery prices was not unique to Ireland but said while food prices in Ireland remain high when compared internationally, in recent years food inflation in Ireland has been the lowest in the EU.

All the major retailers began to reduce the price of their milk and bread mid-way through 2023, although the cuts to milk prices were criticised by farmers.

According to the CSO, looking at the national average prices of some staple items, as of November 2023, the price of a 2.5kg bag of potatoes was up by 30c and a kilo of cheese was up by 21c when compared with November 2022. At the same time, the price of milk and butter fell slightly and were down 6c and 3c respectively.

Nevertheless, grocery inflation in the 12 weeks to November 26, 2023, still remained “incredibly high”, according to analysis by Kantar.

Kantar’s Emer Healy said: “This is the seventh month in a row that there has been a drop in grocery inflation. This is good news for consumers, although the rate is still incredibly high.

“Compared to last month’s inflation rate of 9.8%, there has been a significant drop of 1.2 percentage points, the lowest level we have seen since August 2022. We expect to see this gradual decline in inflation rates continue over the coming months.” 

It is likely other retailers may follow suit with cuts to their products following the move by Aldi, similar to the tit-for-tat milk reductions seen last year, as wholesale and energy costs are down.

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Aldi’s managing director of buying and services Colin Breslin said: “We’ve cut prices across our range on the products that matter most to Irish shoppers — from back-to-school lunches and healthy eating options to core staples that go into the trolley each week.

“We know these price cuts will make a real difference to households right across the country.”