US Insights

It's Time to Get Real About Lidl

Mike Paglia

Director, Retail Insights

Retail 04.26.2017 / 22:00

Lidl_Fuengirola

The buzz is building but the level of understanding is lacking.

If the National Association of Chain Drug Stores Annual Meeting was any indication, the buzz around Lidl’s arrival is reaching a fever pitch.

My colleagues who were at the event tell me that Lidl came up as a key conversation topic in every single meeting they attended. Indeed, I can corroborate the phenomenon, having spent time last week in Arkansas speaking to the supplier community there about Lidl’s impending arrival.

What’s surprising (and a little troubling), though, is the level of misinformation swirling around the retailer that has a demonstrated history of disrupting nearly every market in which it operates. It’s a pattern that first surfaced well over a year ago. Many supplier companies have a preconceived notion of Lidl that diverges significantly with reality. Boiling down everything I’ve heard, it seems that many in the supplier community believe:

  • Lidl operates down-market discounters with an in-store experience to match.
  • Lidl’s predominantly low-income shoppers come from poor areas and do most of their shopping in those areas.
  • Lidl competes primarily with other small-format discounters such as Aldi.

Lidl USlocations

The trouble is that many companies are leaning on this misconception to inform their response to Lidl (or lack thereof). But what if someone told you that Lidl:

  • Is a mid-market retailer with pleasant, attractive (albeit spartan) stores?
  • Draws shoppers from up and down in the income ladder?
  • Underprices the competition by double-digit percentages on branded items while offering superior quality on its private label assortment?
  • Leverages a rotational approach to its assortment and features both food and nonfood items (very similar to the warehouse club model)?
  • Competes (quite successfully) with larger-format stores like supermarkets and supercenters?

That’s Lidl. And it should give you pause. What’s more, Lidl is planning to open its first U.S. stores in mere weeks. The good news is that Kantar Retail can help you prepare. We have an unmatched depth of insights, a global team of Lidl experts, proprietary growth forecasts, as well as the capabilities to help your company both get smart fast and develop an appropriate response to the “Lidl factor.”

Source: Kantar Retail

Editor's Notes

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