With 2013 sales of €48.9bn compared with Carrefour at €76.7bn and Tesco at €73.1bn, Lidl's faster rate of growth combined with Aldi means discount channel sales are expected to have raced up to €211bn against the giant stores’ €385bn on a CAGR of 4% by 2018, according to a new report on the grocery channel by Planet Retail.
Schwarz Group, which also owns the store chains Handelshof and hypermarket Kaufland, has operated since the 1930's. The first Lidl* discount store was opened in 1973, copying the Aldi concept. Schwarz rigorously removed merchandise that did not sell from the shelves, and cut costs by keeping the size of the retail outlets as small as possible. By the year 1977, the Lidl chain comprised 33 discount stores and latest figures show that it currently has 9,800 outlets...
The threat for branded suppliers
Whilst Lidl carry more brands than Aldi, the issue still remains that in a flatline market with any growth coming at the expense of competition, Lidl's growth rate represents a threat to branded products.
However, given its high use of surrogate labels, and with most branded suppliers focused on branded competition, Lidl and Aldi have thus managed to stay beneath traditional radar, in most cases.
NAMs now need to catch up by factoring Lidl & Aldi into their trade strategies, as per our earlier KamBlog
(Alternatively, why not await their discovery that national brands under pressure represent an even greater opportunity than surrogate labels...?)
Schwarz Group, which also owns the store chains Handelshof and hypermarket Kaufland, has operated since the 1930's. The first Lidl* discount store was opened in 1973, copying the Aldi concept. Schwarz rigorously removed merchandise that did not sell from the shelves, and cut costs by keeping the size of the retail outlets as small as possible. By the year 1977, the Lidl chain comprised 33 discount stores and latest figures show that it currently has 9,800 outlets...
The threat for branded suppliers
Whilst Lidl carry more brands than Aldi, the issue still remains that in a flatline market with any growth coming at the expense of competition, Lidl's growth rate represents a threat to branded products.
However, given its high use of surrogate labels, and with most branded suppliers focused on branded competition, Lidl and Aldi have thus managed to stay beneath traditional radar, in most cases.
NAMs now need to catch up by factoring Lidl & Aldi into their trade strategies, as per our earlier KamBlog
(Alternatively, why not await their discovery that national brands under pressure represent an even greater opportunity than surrogate labels...?)
*More Lidl details here
2 comments:
The Aldi model of high quality, limited range at low prices is a challenge that the major supermarkets are ill-equipped to counter. These are not discount stores; they're more efficient stores, with harder working and better paid staff, selling excellent quality product at lower prices. As they open more stores, the problem for the majors will become more obvious.
Thanks, Anonymous, my thoughts entirely…
Aldi and Lidl have been underestimated since they arrived in the UK.
Over the years they have evolved a formula that is perfectly suited to economic downturns, and have rarely surrendered share on the upswing. In other words, slow but steady progression…
The only difference this time being the five year flat-line that is now morphing into a further five years of minimal market growth, with all other retail models geared for 3%+ sales improvement…
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