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Market-Based Solutions to Vital Economic Issues
Research
Jan 10, 2018

The Competitive Price Effects of Lidl’s Entry in the US Grocery Market

Key Takeaways

  • Competing retailers set their prices for individual products, including staples, substantially lower in Lidl markets compared to markets where Lidl is not present.
  • On average, competing retailers near Lidl stores set their prices approximately 9.3% lower than in markets where Lidl is not present, which is more than three times as much as was typically reported in other academic work on Walmart’s entry in a new market.
  • Prices set by retailers in markets where Lidl operates vary considerably among the different supermarket chains.
  • The price reaction results, on average, in substantial dollar savings for customers.
  • Overall, significant cost savings can be obtained for consumers in markets where Lidl Operates, especially when taking into account that prices at Lidl stores are even lower.

Note: Working papers, including any findings, may differ from the final version chosen for publication in academic journals.


View Working Paper

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