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BEST IN FRANCECASE STUDY : LIDL
Guillaume ADIN
Harold GUERIF
Antoine GUILLIER DE CHALVRON
Maxime ROSENWALD
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LIDL and the hard discount market
LIDL34%
Leader Price11%
Ed16%
Aldi16%
Others23%
Number of stores
6800 stores in Europe 3100 stores in Germany 1319 stores in France
Average size: 687 m² Rank 7 in food retailers
LIDL35%
Leader Price27%
Ed14%
Aldi12%
Others12%
Market shares of hard discount
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Background Lidl & Schwarz : 1970 in Souabe
(Germany)
Two mains activities were developed: Food discounters : Lidl Retailers : Kaufland and
Handelshof were grouped into self-service markets and superstores.
Establishement of Lidl in France in 1988 with the opening of the first store in Colmar (Haut-Rhin).In 1989, Lidl opened in the east of France, whereas his major competitor, Aldi, arrived in the north.
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• Classic supermarkets deal more and more cheap products but keep their good reputation
• Sometimes classic dealers create their own hard-discount brand (Carrefour)
• The security of the stores is not at the top : 6 hold-ups during the month of august 2008
• People want products which are always, but with the same level of quality
• Bio and fair-trade products, are still expensive and could be new markets for the hard discount
• LIDL understood how to use the « loi Raffarin » to optimize their implantation all over the country
• External communication : reduced to the minimum
• The LIDL stores are sinister• Any improvement of the
products’ visual : everything stay in transportation’s boxes
• The working conditions are one the worst of the distribution’s sector
• 1400 stores all over the country• Between 50 and 100 openings a
year• 50% of French consumers go to
a LIDL shop• Located in 24 countries : used to
deal with different cultures• Good knowledge of european
suppliers• Power of negotiation with
classical big brands• Since 1973 in Germany :
efficient logistic system Strengths
WeaknessesThreats
Opportunities
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The growth strategy : to go faster than ALDI Quick coverage of the French territory
Huge investments to build warehouses
Agreements of recovery (Dia, Europrix...)
The outlet profile have to fit to the LIDL’s standard
Several regions at a time
Opportunistic acquisition
Saving on market researches
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The growth strategy : to go faster than ALDI « Loi Raffarin »
1 000m² 300m² : administrative authorization of establishment needed○ Defend “small business” against major distributors○ Limit the expansion of hard-discounters
LIDL’s stores : 300m² + expansion requestsEasier than build requests
RequestsApplied Permitted Permitted Rated
2007 Evol 2007 Evol 2007
Building 68 -32% 34 -26% 50%
Extension 68 +26% 45 +22% 66%
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How to fit to the french market ?
German Hard Discount
Little sized shops (less than 600m²)
Single reference by type of product
Lowest prices
Fair Trade
Minimalist presentation of
products
Weekly prices’ reductions on non-
food products
Reduced staff
Only own-label or unbranded
French Hard
Discount
Some of national
and historical
big brands
More fresh vegetables and fruits, more types
of fresh meal…
Fair Trade
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Relationship between employees and management Difficult working
conditions
Spying of employees
Bad intern communication
Poor picture of the company for the consumers
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