Lidl set to overtake Aldi in European stakes
Aldi by rolling out stores in 15 European countries where the
latter has no presence - a move which should also turn it into
Europe's biggest discount store operator in the process, suggests a
new report.
Lidl should overtake Aldi as the leading small format discount store operator in Europe by 2012, according to food & grocery think tank IGD - reversing the situation in the domestic market, where Aldi is by the biggest discount operator with a 9.4 per cent share of the market (Lidl has 4.9 per cent), based on the IGD's estimate of the total German grocery market at €202.7 billion.
Both retailers have been expanding rapidly into France and western Europe, according to the IGD report, but Lidl's strategy to move into central and eastern Europe has seen it rapidly gain market share in the discount sector.
Lidl already achieves higher sales from its non-domestic European markets than Aldi (€9 billion vs. €8 billion), and it is stronger than Aldi in France, Spain and Ireland. It is also targeting Denmark, Hungary, Estonia, Latvia, Lithuania, Croatia and Slovenia where Aldi has no presence. Lidl is also already established in a further eight markets where Aldi is not present.
By contrast, Aldi is targeting Switzerland and Norway in Europe (which Lidl is also targeting) and is focusing on global expansion in Canada and New Zealand. It is this focus on non-European markets by Aldi which is likely to give Lidl the advantage in the local market.
"Lidl moving to the number one position in the discount retailing sector, overtaking the current market leader Aldi by 2012, will impact suppliers. It illustrates the pace of change in this dynamic sector and highlights the need for players to keep up to date with developments," said Joanne Denney-Finch, chief executive of the IGD.
"In discounting we are seeing a dramatic change worldwide, as the discounters move away from their core lines. In Europe, they have gone from a focus on dry goods to stocking fresh meat and produce, ready meals and healthy eating alternatives, really helping to broaden their consumer appeal.
"The discounters' combination of low price and convenience is clearly proving irresistible and we anticipate this will fuel their continued growth. They now list key brands, are increasing their marketing emphasis and are introducing customer service initiatives, such as debit cards and longer opening hours. With range adaptation and own label improvements there are opportunities for suppliers - but they must understand and back the winners."
