Price war results in less choice

Price is playing an increasingly important role in the retail trade, as shown by the enormous success of the hard-line discount chains such as Aldi and Lidl throughout Europe. The price orientation of many customers is even noticeable in the pet product sector, with the big trading groups waging an ever fiercer battle at the lower end of the market.
As a preferred method of maintaining profit margins to some extent as the selling price falls ever lower, the retail trade has gone over increasingly to private labels. These have already captured a significant market share from branded products in high-selling product segments such as pet food or cat litter.
Consumers benefit from the price competition between the big chains. But the very factors that make pet owners happy are gradually robbing trade and industry of the basis of their existence, for producing the same quality at cheaper and cheaper prices is not sustainable in the long term. In the cat litter segment, for example, some well-known manufacturers have been sacrificed on the altar of price competition in the last few years. Even the companies still surviving have reached a point at which they can no longer meet the maximum demands of the big retail chains. Freight and energy costs, which feature particularly large in the case of cat litter, have risen so sharply in recent months that cheaper prices will no longer be possible, and price rises might be an inevitable consequence.
Price wars only strengthen the big retail groups and ultimately lead to a decline in range variety when only discount chains are still active in the market. Even many consumers have realised this. In addition, it turns out time and again to be the case that the cheapest product doesn’t always have to be the best. This is no different in the case of cat litter than it is with other product groups, which is why some high-quality premium litter varieties have now succeeded in capturing a niche in the market. The speciality trade, which is more heavily dependent on a high profit margin than the food retail trade, should be promoting these products rather than directing its attention solely to keeping up with the big retail groups in the price battle.
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Ralf Majer-Abele