Aldi Drops Milk Prices Under a Buck

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September 21, 2010

Aldi stores lowered its private label Friendly Farm milk prices to 99 cents per gallon, the deepest price cut in a milk price war that has been simmering most of the summer in the Dallas market.

The limited assortment retailer announced it will hold prices at 99 cents until early October, and will increase milk orders by as much as 85 percent to keep pace with customer demand, according to a report in the Dallas Morning News. The promotion limits the purchases of four gallons per shopper.

Although milk is often used by grocers as a loss leader, Aldi’s pricing is significantly below the $3.31 national average price of a gallon of milk, according to the U.S. Bureau of Labor Statistics.

BLS spokesman Gary Steinberg told the Dallas Morning News he couldn't find a gallon of milk priced below $1 in the government's database over the past 15 years.

Some competitors in Dallas, including Kroger and Tom Thumb are selling their private label milk for approximately $1.68 a gallon, according to the report.

In March when Aldi entered the Dallas-Fort Worth market, its milk was priced at $1.79 a gallon, with prices gradually dropping all summer. Last month, Aldi milk prices were $1.29 a gallon.

Some competitors matched Aldi’s price drops over the summer, with Walmart staying neck-in-neck, but so far no retailers have matched the 99-cent price, according to the report.

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