 | Aldi And Lidl In America 2017Release date: June 5th, 2017 (154 pages) PDF/Powerpoint format. Price: GBP2,499.00 |
Abstract
The grocery industry is focusing on the online revolution and AmazonFresh. But, actually, a different format is outperforming the growth in the online channel and the total sector by quite a margin – the hard discounters.
Following that logic, Schwarz’ CEO has mothballed the Lidl click & collect prototype in Berlin. He pointed to the UK, the most advanced online grocery market. The fastest growth, again more than 20% this month, is achieved by Aldi and Lidl.
So, while focussing on the long term, the digital revolution and transformation is of course the right thing to do, grocers shouldn’t take their eyes off the ball. In the immediate here and now – the discounters are the real threat to top line sales and margins.
And now Schwarz Group’s Lidl, the EU’s biggest retailer by sales, is coming to America…
Table of contents
| Executive summary | p11 |
| The Concept | p15 |
| The concept: product centricity, relentless process optimisation | p16 |
| The concept: modernising one single format, internationalisation, buying power | p17 |
| A winning format: The Discounter – success factors | p18 |
| The concept: adaptability, agility, online opportunity, optimisation and efficiency | p19 |
| The concept: Aldi Sued expansion | p20 |
| Global retailer ranking: Top ten by sales 2015, USA retail & grocery data | p21 |
| Global Top 10 Retailers, $bn sales 2015: ranking and analysis | p22 |
| USA data: population, retail sales, grocery sales in $m, p.c. spend in $, 2011-16 | p24 |
| Aldi Sued USA | p25 |
| Aldi: A completely underestimated business model | p26 |
| Aldi: Simplicity, simplicity, simplicity – fine tuning a single format over decades | p27 |
| Aldi: Efficient layout and product presentation and the all important SKU count | p28 |
| Aldi: Lean SKU count means bigger buying power than Wal-Mart | p29 |
| Aldi: Supplier relationships and the quality focus | p30 |
| Financials and KPIs: Aldi 2017 | p31 |
| Aldi: The original – split into two, an organising principle to manage complexity | p32 |
| Aldi: Sales 2011 - 16, Sued & Nord in €m, international vs domestic | p33 |
| Aldi: The diverging performance in Germany, leading the sector in sales per store | p34 |
| Aldi: Profitability and margin decline in Germany, record investment, brand listings | p35 |
| Aldi: new store concept and fresh ranges drive up staff costs | p36 |
| Aldi: Benchmarks, sales densities, Sued ahead of Nord, profits and margins | p37 |
| Aldi USA 2017 | p38 |
| Aldi: US Figures 2015 - 16, sales, stores, space, sales per store, sales density | p39 |
| Aldi: Aldi Sued – a rising force in US grocery, operates from coast to coast | p40 |
| Aldi: USA, investing $3.0bn, simply living | p41 |
| Aldi: Aldi retailing strategy in the USA | p42 |
| Recent key developments | p43 |
| Recent key developments: Aldi announces accelerated growth strategy | p44 |
| Recent key developments: Aldi $1.6bn nationwide store remodel plan | p45 |
| Pricing profile versus Walmart | p47 |
| Strategy: Aldi pricing versus Walmart, research shows considerable gap | p48 |
| Strategy: … then Walmart lowers prices … | p49 |
| Strategy: Walmart lowers prices, the Reuters data | p50 |
| Strategy: Aldi battles Walmart for price leadership | p51 |
| Updated stores | p54 |
| Updated stores: Aldi store strategy USA | p55 |
| Updated stores: Aldi begins remodeling stores near first Lidl sites | p57 |
| Store visits - pictures | p59 |
| Trader Joe’s | p63 |
| Trader Joe’s: Figures 2015 - 16, sales, stores, space, sales per store, sales density | p64 |
| Aldi Nord: Trader Joe – highest sales density in the USA | p65 |
| Aldi Nord: Trader Joe’s innovative take on grocery | p66 |
| Store visits - visits | p68 |
| Outlook: What are Aldi’s likely future plans? Trader Joe expansion? | p69 |
| Outlook: Should the Trader Joe’s concept be brought to the EU? | p70 |
| Lidl 2017 | p71 |
| Lidl: the copy cat overtaking Aldi, the original | p72 |
| Lidl: the brands equilibrium, Kaufland the growth driver in CEE | p73 |
| Lidl: OSA, Warendruck, operational independence for Lidl and Kaufland – until now? | p74 |
| Lidl: category management, always the second mover | p75 |
| Schwarz: Data and KPIs | p76 |
| Schwarz: sales 2010-17, total & domestic growth, domestic share of total | p77 |
| Lidl: strong growth essentially lfl, pan EU presence, big bang expansion | p78 |
| Lidl: store upgrades, premiumisation, bake off stations, vertical integration | p79 |
| Lidl: efficiencies in the supply chain and stores | p80 |
| The expansion into the USA | p81 |
| International expansion: USA delays and nervousness | p82 |
| International expansion: high expectations, scheduled to start trading in 2018 | p83 |
| International expansion: USA HQ in Arlington, Virginia, take lessons from Aldi’s US journey | p84 |
| International expansion: USA laying the groundwork, around 40% national brands | p85 |
| International expansion: USA new store concept, Aldi, Dollar stores, stiff competition | p86 |
| International expansion: USA expansion steered from Ireland, SAP HANA, DCs | p87 |
| Recent key developments | p88 |
| Recent key developments: Lidl openings to attack Aldi | p89 |
| Recent key developments: Lidl & Aldi store location map and overlap | p90 |
| Recent key developments: Lidl looks for sites in Ohio | p91 |
| Recent key developments: US grocers reacting preemptively to Lidl opening | p92 |
| Recent key developments: Lidl looking for sites in Texas | p93 |
| Recent key developments: Lidl starting date revealed for 20 sites | p94 |
| Recent key developments: The locations for Lidl’s first 20 stores | p95 |
| Recent key developments: Lidl’s private label structure in the USA | p97 |
| Store impact analysis | p98 |
| The prototype store: Lidl in Fredericksburg, Va | p99 |
| New store concept: the EU model, energy efficiency | p101 |
| Store impact analysis: First 20 Lidl stores will impact Walmart | p102 |
| Store impact analysis: Lidl store location impact analysis on competitors | p103 |
| Store impact analysis: Southeast, Mid-Atlantic ripe for Lidl share growth | p106 |
| Store impact analysis: low staff cost ratios | p107 |
| Store impact analysis: Has Lidl secured the right sites? | p108 |
| Strategy: Lidl USA 2017 | p109 |
| Lidl: two top priorities for the USA | p110 |
| Vertical Integration | p111 |
| Vertical integration: achieved in soft drinks, progressing in confectionery, the PET system | p112 |
| Vertical integration: vertical integration in fruit and vegetables, DCs built, owned and run by Lidl | p113 |
| Vertical integration: even bigger suppliers completely out of capacity when dealing with Lidl | p114 |
| Vertical integration: delays with the ice cream project, investment scaled up, cutting edge facilities | p115 |
| Fresh & local | p116 |
| Fresh & local: pivot to offer quality and freshness and low price | p117 |
| Fresh & local: the importance of vertical integration | p118 |
| Fresh & local: bake off stations, meat, poultry, seafood | p119 |
| Fresh & local: Triple supply, replenishment costs, supply chain | p120 |
| Fresh & local: moving away from standardisation to localisation? | p121 |
| Outlook: Questions answered: Aldi & Lidl 2017 | p122 |
| Questions: What will be the ultimate size footprints of Aldi and Lidl in the USA? | p123 |
| Questions: Will Aldi and Lidl settle more in urban, suburban, or rural markets? | p124 |
| Questions: What have been the biggest hurdles and learnings for Aldi? | p125 |
| Questions: Is Aldi a complementary trip, or a competing one, vs. Walmart? | p126 |
| Questions: What will be the biggest differences between Aldi and Lidl in the U.S.? | p127 |
| Questions: Who is most at risk to lose market share to Aldi and to Lidl? | p128 |
| Questions: What could be the ultimate market share for Aldi and Lidl? | p129 |
| Questions: Do Aldi and Lidl have the right management teams? | p130 |
| Questions: What are the most effective defense tactics from competitors of Aldi? | p131 |
| Questions: How close in price does Walmart needs to get vs. Aldi? | p133 |
| Questions: What customer is Lidl targeting? | p134 |
| Questions: What are grocers doing to prepare for Lidl’s East coast expansion? | p135 |
| Questions: What are Aldi and Lidl doing on the e-commerce side? | p136 |
| Questions: Why did Lidl decide that now was the right time to push into the US? | p137 |
| Questions: How many US stores will Aldi and Lidl operate five years out? | p138 |
| Questions: Will Aldi or Lidl ever become a leading player in any metro market? | p139 |
| Questions: How are Aldi and Lidl funding their growth? | p140 |
| Questions: Will Lidl’s entry have a better chance of success than Tesco? | p141 |
| Recommendations | p143 |
| Recommendations: FMCG Players In The USA Should Get Ready For Lidl Now | p144 |
| The impact on Walmart | p146 |
| The impact on Walmart: the context | p147 |
| The impact on Walmart: the new threat from the discounters | p148 |
| The impact on Walmart: the discounters business model | p149 |
| The impact on Walmart: Aldi outperforms Walmart on SKU buying level | p150 |
| Sources | p154 |
| Chart 1: A winning format: The Discounter – success factors | p18 |
| Chart 2: Global Retailers Top 10, $bn sales 2015 | p22 |
| Chart 3: Reuters pricing data Aldi vs Walmart | p52 |
| Chart 4: Lidl & Aldi store location map and overlap | p90 |
| Chart 5: Triple supply, replenishment costs, supply chain | p120 |
| Table 1: USA data: population, retail sales, grocery sales in $m, p.c. spend in $, 2011-16 | p24 |
| Table 2: Aldi: Figures 2011 - 16, Sued & Nord in €m, international vs domestic | p33 |
| Table 3: Aldi: US Figures 2015 - 16, sales, stores, space, sales per store, sales density | p39 |
| Table 4: Trader Joe’s: Figures 2015 - 16, sales, stores, space, sales per store, sales density | p64 |
| Table 5: Schwarz: sales 2010-17, total & domestic growth, domestic share of total | p77 |
