Aldi and Lidl in America 2017

Aldi And Lidl In America 2017

Release date: June 5th, 2017 (154 pages)
PDF/Powerpoint format. Price: GBP2,499.00


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