 | Lidl Kaufland 2016, Europe's Leading RetailerRelease date: June 14th, 2016 (213 pages) PDF/Powerpoint format. Price: GBP2,499.00 |
Abstract
WHO IS THIS REPORT FOR?
Our clients include:
- Global retailers,
- FMCG companies,
- Professional services companies in logistics, property and finance,
- Government institutions,
- Media agencies,
- Universities and many others.
Companies such as Tesco, Casino, Carrefour, Asda, Delhaize, Coca Cola, Nestle and Pepsi are using our thought-provoking insights to understand how future trends will impact their business.
WHAT ARE THE KEY QUESTIONS?
Despite their success, discounters remain amongst the poorest understood retail formats.
Competing retailers are interested in Lidl's cost structures and strategic priorities going forward. FMCG suppliers are looking for recommendations how to sell to and partner with Lidl.
This report provides answers in areas such as:
- Lidl's new store concept and the strategy behind the premium stores
- The transition from hard discounter to premium player
- The importance of fresh ranges and premium private label
- How Lidl is moving from standardisation towards a more local approach
- What does this mean for the business model
- Analysis of Lidl's vertical integration strategy
- How to profit as a FMCG supplier when partnering with Lidl
- Why does Lidl rely on triple supply chains so much
- How does the discounter manage the FMCG majors
- What problems has Lidl had with its Deluxe premium range
- What has the discounter done to resolve some of them
- What have been the consequences of the price war between Aldi and Lidl/Kaufland
- Lidl's online strategy and how click & collect will be fitted into the new prototype store
- How the expansion into the USA will work out
- Why is Lidl so different from Aldi
- Will Kaufland return to its former strength in Germany
WHAT ARE THE MAIN TOPICS COVERED?
This is the most exhaustive and up-to-date report about the EU's biggest retailer.
We focus on Lidl's main markets individually and also review Lidl's actions month per month during the past year.
You will discover the top 8 priorities of Lidl's new strategy.
Table of contents
| Executive summary | p16 |
| The concept | p27 |
| Concept: product centricity, relentless process optimisation | p28 |
| Concept: modernising one single format, internationalisation, buying power | p29 |
| A winning format: The Discounter – success factors | p30 |
| An introduction | p31 |
| Lidl: the copy cat overtaking Aldi, the original | p32 |
| Lidl: the brands equilibrium, Kaufland the growth driver in CEE | p33 |
| Lidl: OSA, Warendruck, operational independence for Lidl and Kaufland – until now? | p34 |
| Lidl: category management, Kaufland the most successful EU hypermarket operator | p35 |
| Lidl: always the second mover, threat to Tesco, more potential for Kaufland | p36 |
| Recent Key Developments | p37 |
| December 2014: Lidl launches Deluxe online in Spain | p38 |
| January 2015: Polish DC, creating jobs in Scotland | p39 |
| February 2015: Lidl focuses on Austria, renewal programme | p40 |
| February 2015: Lidl ramps up investment in Spain, supply chain initiatives | p41 |
| February 2015: Lidl starts Lithuanian expansion and invests in Poland | p42 |
| February 2015: Spain sales decline in 2013, Serbia, Hungary, Croatia | p43 |
| March 2015: Lidl changes tactics by debuting at the Paris Agricultural Show | p44 |
| March 2015: Sales rise in Germany, investment in Spain and Croatia | p45 |
| March 2015: Lithuania, heavy DC investment, Slovakia, Greece, UK, German stores | p46 |
| April 2015: Lidl will open 60 stores in Ireland, some on stilts | p47 |
| April 2015: Lidl Italia second store prototype opened, lower prices in Suisse | p48 |
| May 2015: US expansion – all steered from Ireland | p49 |
| June 2015: Swiss DC, France premiumising ranges, UK craft beer, Belgian plans | p50 |
| June 2015: Lidl Sweden, third profitable year in a row | p51 |
| June 2015: Italy investment, DC expansion in N.I. | p52 |
| July 2015: Lidl laying the foundation for its US business | p53 |
| July 2015: Lidl turnaround and growth spurt in Spain | p54 |
| July 2015: DC in Bulgaria, explosive UK growth revealed | p55 |
| August 2015: Belgium fresh promotion, vertical integration DE, Kaufland | p56 |
| September 2015: Italy, Finland, new stores Suisse, Croatia, UK wages, DK profits | p57 |
| October 2015: Lidl Italy new store prototype | p58 |
| October 2015: Lidl store efficiency Hungary, French DC, US DC | p59 |
| October 2015: Lidl reacts to Amazon Pantry by launching its own box | p60 |
| November 2015: Lidl UK store of the future, planning applications soar | p61 |
| November 2015: Lidl buys recipe bag provider Kochzauber | p62 |
| December 2015: New store concept in CZ, DE and POR, expansion US, SER | p63 |
| January 2016: Category management, US sites, reacting to Aldi Italy | p64 |
| February 2016: Lidl pushes fair trade in UK | p65 |
| March 2016: UK loyalty, Swiss minimum wage and regional products | p66 |
| March 2016: Lidl launches online store in Belgium, Netherlands and CZ | p67 |
| March 2016: Serbia, Australia trial plans, new stores in Spain | p68 |
| March 2016: Portugal modernisation programme to continue | p69 |
| March 2016: Spanish market share gains, wage rises, Denmark’s mobile payments | p70 |
| April 2016: Lithuania expansion, new stores in BE/NL | p71 |
| April 2016: Kaufland Romania, electrical cars, foreign expansion, Moldova | p72 |
| April 2016: Bulgarian investigation, Lidl Romania Metro promotion | p73 |
| Data and national KPIs | p74 |
| Global Retailer Top 10, $bn sales 2015, from Alibaba to Carrefour | p75 |
| Global Top 10 Retailers, $bn sales 2015: ranking and analysis | p76 |
| Schwarz: Data and KPIs | p77 |
| Schwarz: sales 2009-16, total & domestic growth, domestic share of total | p78 |
| Schwarz: benchmarks, sales, stores, space, average space, sales densities in 2015 | p79 |
| Lidl: the most internationalised and biggest retailer in the EU | p80 |
| Lidl: countries, benchmarks, net sales, stores, space, sales densities in 2015 1/2 | p81 |
| Lidl: countries, benchmarks, net sales, stores, space, sales densities in 2015 2/2 | p82 |
| Lidl: tackling the 10,000 stores barrier again, 10 million sq m under the Lidl banner | p83 |
| Lidl: 2015, Top 10 markets, ranked by sales per country, per store, sales densities | p84 |
| Lidl: 2015, market share per country, from Slovakia to the UK | p85 |
| Lidl Germany | p86 |
| Germany: Lidl outperforms the other discount players once again | p87 |
| Germany: Lidl Private Label relaunch, Super 5 promotions | p88 |
| Germany: new concept store visits, store entrance pictures | p89 |
| Germany: new concept store visits and pictures: bake off station, shelf stable and fresh areas | p90 |
| Germany: new concept store visits and pictures: non food, check out, drinks packaging recycling | p91 |
| Lidl France | p92 |
| France: Lidl invests heavily, local produce extension, SKU count reaches 1,600 | p93 |
| France: Lidl France premiumising, PL strategy, distancing the competition | p94 |
| France: Lidl tests its PL beauty brand Cien in Paris and sponsors handball | p95 |
| France: the transition challenge from hard discount to premium player | p96 |
| Lidl UK | p97 |
| UK: record numbers, fastest growing grocer | p98 |
| UK: premium private label, ‘Deluxe with Love’, fair trade | p99 |
| UK: Deluxe range highlights, private label range win awards | p100 |
| UK: £1.5bn store expansion to include self-checkouts and toilets | p101 |
| UK: Lidl minimum wage, advertising cooperation with the Daily Mail | p102 |
| UK: aggressive store pipeline and advertising budget | p103 |
| UK: We Love Denim and Oaklands | p104 |
| UK: plans submitted for DC in SW England | p105 |
| Lidl Italy | p106 |
| Italy: Lidl is reacting as Aldi enters Italy, sponsoring the Azzurri | p107 |
| Italy: Lidl Italia second store prototype opened, energy efficiency, Italiamo PL | p108 |
| Italy: Lidl Italy new store prototype, store pictures | p109 |
| Italy: investment plans, new DC to support aggressive store expansion | p110 |
| Lidl Netherlands | p111 |
| Netherlands: Lidl strong fresh performance, premiumisation of offer | p112 |
| Netherlands: online and new pilot stores | p113 |
| Strategy | p114 |
| Strategy: eight top priorities | p115 |
| 1. 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 |
| 2. FMCG A brands | p122 |
| FMCG A brands: price wars between Aldi and Lidl in Germany, margin compression | p123 |
| FMCG A brands: preemptive price cuts from Lidl on potential new Aldi listings | p124 |
| FMCG A brands: Coordination between Lidl and Kaufland, price leadership image | p125 |
| FMCG A brands: signals to the FMCG majors, Aldi counter attacks | p126 |
| 3. Vertical integration | p127 |
| Vertical integration: achieved in soft drinks, progressing in confectionery, the PET system | p128 |
| Vertical integration: vertical integration in fruit and vegetables, DCs built, owned and run by Lidl | p129 |
| Vertical integration: even bigger suppliers completely out of capacity when dealing with Lidl | p130 |
| Vertical integration: delays with the ice cream project, investment scaled up, cutting edge facilities | p131 |
| Vertical integration: motivation to become more independent from unreliable partners | p132 |
| 4. Private label: non-food | p133 |
| Non food: Own brand development in non food, opportunity identified | p134 |
| Non food: The multichannel advantage of higher volumes, importance of planning | p135 |
| Non food: onshoring production and branding | p136 |
| 5. Private label: Deluxe & wine | p137 |
| Private Label strategy: Lidl’s Deluxe, after the exuberance tighter SKU management | p138 |
| Private Label strategy: moving up is hard to do – difficulties with wine | p139 |
| Private Label strategy: Lidl’s PL relaunch of Bellarom and Milbona | p140 |
| Lidl: Pan-European promotion on premium wines, €349 per bottle | p141 |
| Lidl: range extension into wine – going for premium and luxury | p142 |
| Lidl: wine driving footfall to online, becoming multichannel, copying Aldi’s playbook | p143 |
| Lidl: using toys as footfall draw and to shift quality perceptions | p144 |
| Lidl: cleaning up promotional activity, Deluxe reigned back | p145 |
| Lidl: concentrating on the fastest sellers, cost of Deluxe missteps | p146 |
| 6. Store update strategy | p147 |
| New store updates: an introduction | p148 |
| Portugal: modern exterior, Quality and Fresh banner | p149 |
| Portugal: health and beauty aisles, brand promotions | p150 |
| Portugal: standalone fish counter, fresh food displays, fairtrade support | p151 |
| Portugal: wine and spirit range | p152 |
| Portugal: sit-in café | p153 |
| France: takeaway coffee, recycling bins, making use of added space | p154 |
| France: mixing old and the new, toilets, flowers | p155 |
| France: wood effects, strong French identity | p156 |
| France: promotions at checkout | p157 |
| United Kingdom: modern Rushden store | p158 |
| United Kingdom: premium interior design | p159 |
| United Kingdom: Tooting store, more spacious | p160 |
| United Kingdom: bigger fridges and freezer, wider units | p161 |
| New store concept: the energy efficiency gains of the new model | p162 |
| 7. International expansion – USA | p163 |
| USA: delays and nervousness | p164 |
| USA: high expectations, scheduled to start trading in 2018 | p165 |
| USA: HQ in Arlington, Virginia, take lessons from Aldi’s US journey | p166 |
| USA: laying the groundwork, around 40% to be national brands | p167 |
| USA: new store concept, Aldi, Dollar stores will prove stiff competition | p168 |
| USA: Lidl US expansion – all steered from Ireland | p169 |
| USA: Warm welcome for Lidl, SAP HANA technology, DC construction, site search | p170 |
| 8. Online | p171 |
| Lidl: online operations, huge branded non-food presence online, international | p172 |
| Lidl: tackling the non-food issue, easier at Lidl than at Kaufland | p173 |
| Lidl: online relaunch in Germany, coffee world, wine, pet foods, nappies etc | p174 |
| Lidl: online turnover figures in Germany | p175 |
| Lidl: reacting to Amazon Pantry by launching its own box | p176 |
| Lidl: purchase of recipe bag provider Kochzauber | p177 |
| Lidl: online store launch in Belgium, Netherlands and Czechia | p178 |
| Kaufland | p179 |
| Kaufland: Schwarz’s best innovation? Saturation in Germany? | p180 |
| Kaufland: SKU range, private labels, online retailing | p181 |
| Financials and KPIs | p182 |
| Kaufland: Countries, benchmarks, sales, stores, space, sales densities in 2015 | p183 |
| Kaufland: sales slowdown in Germany, process optimisation, change management | p184 |
| Kaufland: process reorganisation leads to staff disquiet | p185 |
| Kaufland: still in much better shape than the competition | p186 |
| Strategy Strategy: How Kaufland aims to return to growth in Germany | p188 |
| Store updates | p189 |
| Kaufland: even Kaufland is starting to struggle… | p190 |
| Kaufland: great modernisation programme for 50 German hypermarkets | p191 |
| Kaufland: trialling regional ranges and convenience | p192 |
| Kaufland: Non food innovation | p193 |
| Private label strategy | p194 |
| Kaufland: launches premium private label | p195 |
| Kaufland: “Exquisit” to strengthen image and enable uptrading | p196 |
| Kaufland: K-classic, a hugely successful private label line, vertical integration | p197 |
| Kaufland: network effects between Kaufland and Lidl | p198 |
| Lidl/Kaufland: supplier relationships, no traditional category management | p199 |
| Lidl/Kaufland: benefits of the sourcing model, supply chain collaboration | p200 |
| Kaufland: launching a private label at Kaufland, simplicity, simplicity, simplicity | p201 |
| Online | p202 |
| Kaufland: launches delivery service in Berlin, dark stores the right choice | p203 |
| Kaufland: heavy online competition in Berlin, is Hamburg next? | p204 |
| Kaufland: methodological approach, going head to head with Amazon | p205 |
| Kaufland: app, findbox innovation in store | p206 |
| Logistics strategy | p207 |
| Kaufland: the logistics secret, the potential of the return trip, eradicating empty runs | p208 |
| Kaufland: higher capacity utilisation and lowering overall costs, supplier collaboration | p209 |
| Outlook | p210 |
| Kaufland: kick-starting domestic growth, expansion, new formats | p211 |
| Kaufland: synergies across Lidl and Kaufland | p212 |
| Sources | p213 |
| Charts and Tables Chart 1: A winning format: The Discounter – success factors | p30 |
| Chart 2: Global Retailers Top 10, $bn sales 2015 | p75 |
| Chart 3: Triple supply, replenishment costs, supply chain | p120 |
| Table 1: Schwarz: sales 2009-16, total & domestic growth, domestic share of total | p78 |
| Table 2: Schwarz: benchmarks, sales, stores, space, average space, sales densities in 2015 | p79 |
| Table 3: Lidl: countries, benchmarks, net sales, stores, space, sales densities in 2015 1/2 p81 Table 4: Lidl: countries, benchmarks, net sales, stores, space, sales densities in 2015 2/2 | p82 |
| Table 5, 6 and 7: Lidl: 2015, Top 10 sales per country in €m, per store, sales densities | p84 |
| Table 8, 9 and 10: Lidl: 2015, market share per country, from Slovakia to the UK | p85 |
| Table 11: Kaufland: Countries, benchmarks, sales, stores, space, sales densities in 2015 | p183 |
