June 27, 2017
A Peek Inside Lidl – Second German Grocer Establishes East Coast Beachhead
Second only to the Amazon-Whole Foods buy-out in June was the opening of the first Lidl supermarkets in Virginia and the Carolinas. Much like fellow German retailer, Aldi, this European chain is targeting the likes of Walmart, Kroger, Food Lion and yes – its comrade from Germany, Aldi.
Aldi’s U.S. footprint began in Iowa in 1976 and is now at 1,600 stores. Lidl’s first salvo of its battle is a promise of 100 stores, along the East Coast by the summer of 2018.
It’s no surprise that the Lidl we found in Winston-Salem, NC was directly across the street from a Walmart. According to market analysts 90% of the new stores are within five miles of a Walmart and 55% are within five miles of a Kroger.
We took a peek in a fresh, new Lidl in Winston-Salem, NC and here is what we found. The first impression outside the 20,000 square foot store is, “this is different”. Highly placed windows drive sunlight inside to offer more natural lighting that compliments the first impression as you walk into the store, the smell of fresh bread a beautiful produce.
Wall graphics define Lidl’s positioning to customers and near the employee break area the company’s mantra of “rethink grocery” is posted as they exit and go on stage to stock shelves and assist customers.
More than 90% of products are private label, most with heavy emphasis on some healthy aspect on packaging, but the store is devoid of any other hype, such as shelf talkers or shippers. While most every section did include a few branded products, it is evident that it is all about pricing strategies for those in search of a bargain.
For example, a 12 oz. bottle of the chain’s cayenne pepper hot sauce was priced 85¢ while is differentiated 5 oz. bottle of its private label chili and jalapeño hot sauces were priced at $2.29. Pantry staples, such as organic tomato sauce sold for 79¢ while a 28 oz. can of organic diced tomatoes labeled to include sea salt was at $1.69.
Aisles were wide, well lit and still maintained the same center aisle layout for canned and packaged goods with fresh, refrigerated or frozen items in the perimeter. Within the center of the store was a long row of bargain “new surprises” and “get ‘em while they last” that ran the gambit from palates rings to dumbbells and shoes.
Despite the EDLP strategy on private label the mood within was upscale, fresh and healthy – kudos to the store designers or category managers.
It was also evident as I rode away from the Lidl store that its entrenched competitors have noted the new import in town. A few blocks from Lidl a digital billboard reminded motors that Food Lion had been there for them for 60 years. A second billboard for Walmart reminded us that they offered order ahead shopping and pick up. I’m also sure that consumers may note sudden discount bargains on store label products as they try to maintain customer loyalty in an increasingly fragmented supermarket business.