Lidl case study: responding to consumer needs in the discount retail sector

Published by: Datamonitor

Published: Oct. 10, 2008 - 24 Pages

Table of Contents

DATAMONITOR VIEW

CATALYST

SUMMARY

ANALYSIS

The UK discount grocery sector is growing

Rising food and fuel prices have benefited the UK discount retail sector

Leading supermarkets are addressing the credit crunch and the discount retail threat by slashing their own prices

Lidl's UK market share is growing, benefiting from consumer price concerns

Lidl is the third leading grocery retailer in Germany, and is growing fast in the UK

Lidl was the leading discounter in the UK in 2007, with a growing market share

Lidl has reported strong UK sales so far in 2008 and is placed high up in a retail satisfaction survey

The company plans to open numerous UK stores to capitalize on consumer price concerns

Store growth has been aided by its acquisition of many Kwik Save stores

Lidl's website contains a section specifically requesting information on new sites on which it could locate new stores

However, the stores are still perceived to be too basic for some consumers, while concerns over staff welfare is also an issue

No frills approach has put some consumers off Lidl

The company has a reputation of being a bad employer

Lidl has modernized its image to focus more on quality and health

Lidl introduced a line of fairtrade products in 2006, capitalizing on the trend for ethical living

However critics have said this was mere 'green-washing', due to inconsistencies with some of its working practices

There was controversy when Lidl tried to buy Germany's leading organics stores Basic in 2007

In early 2008, the company promoted its expanded fresh produce range with a five-a-day campaign

Lidl employs a celebrity chef to develop online recipes, emphasizing its products' quality

Lidl's online offering is growing in popularity, but could be developed further

Lidl's website has grown in monthly visitors, as people look for the latest deals

The company does not have an online UK retail service, which could be a future opportunity

APPENDIX

APPENDIX

Case study series

Methodology

Secondary sources

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Lidl is the tenth leading grocery retailer in the UK, with a growing market share

Table 2: This table shows what loyal main users like about Lidl in food and grocery. Loyal customers say there is nowhere else they would prefer to do most of their shopping for food and grocery

Table 3: This table shows what disloyal main users dislike about Lidl in food and grocery. Disloyal main users do most of their food and grocery shopping at Lidl but would prefer to shop elsewhere

List of Figures

Figure 1: Lidl's website has a page devoted to new property requests

Figure 2: Lidl's fairtrade range, Fairglobe, encompasses five products

Abstract

• Gain insight into the methods used by important industry players to give them a competitive edge
• Identify specific areas for operational improvements
• Capitalize on the knowledge of experienced companies when entering a new niche or market

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