It does say in the article that the comparison does not take the different VAT rates into account. Without such a comparison, the article really has no basis.
Quoting from the article “There are several caveats regarding these comparisons. Aldi and Lidl have adjusted their no-frills formula here to Irish tastes and incur higher costs as a result, with more staff and with more fresh food on shelves here, for instance. The comparison ignores VAT, ranging from zero to 21 per cent in Ireland and 7 to 19 per cent in Germany.”
Even if all the German products were at their lower rate of 7 percent, and all the Irish at our highest rate of 21% the increase in prices in Ireland compared to Germany would still be huge! The water is 148 percent more expensive in Ireland…
One way that all retailers including the Germans can implement price changes without drawing much attention is to keep the price the same but reduce the size/weight of the product so that the cost per kilo etc is higher. It is the cost per kilo etc that one needs to track.
Monday 2 March, 2009 at 1:40 pm
It does say in the article that the comparison does not take the different VAT rates into account. Without such a comparison, the article really has no basis.
Quoting from the article “There are several caveats regarding these comparisons. Aldi and Lidl have adjusted their no-frills formula here to Irish tastes and incur higher costs as a result, with more staff and with more fresh food on shelves here, for instance. The comparison ignores VAT, ranging from zero to 21 per cent in Ireland and 7 to 19 per cent in Germany.”
Monday 2 March, 2009 at 1:47 pm
I agree Joanne; I think Lidl and Aldi still offer much better value than any other supermarket here in Ireland.
Monday 2 March, 2009 at 11:51 pm
Even if all the German products were at their lower rate of 7 percent, and all the Irish at our highest rate of 21% the increase in prices in Ireland compared to Germany would still be huge! The water is 148 percent more expensive in Ireland…
Friday 6 March, 2009 at 11:47 am
One way that all retailers including the Germans can implement price changes without drawing much attention is to keep the price the same but reduce the size/weight of the product so that the cost per kilo etc is higher. It is the cost per kilo etc that one needs to track.