Friday, 3 April 2015

Analysing the success of Lidl

It's been just over three years since Lidl opened its store in Jeziorki; my first impressions were dire. After walking around the aisles, Eddie and I left having bought zilch. As we left, we exchanged the same thought - "There is absolutely nothing in this shop". The reason our first trip to Lidl was so utterly negative was the lack of well-known brands. From butter to beer, from canned fish to sliced ham, Lidl's shelves stocked nothing familiar. [see this post from three years ago].

But Lidl has changed. Indeed, Lidl is fast becoming a major challenger to the retail establishment in the UK, where the Big Four (Tesco, Sainsbury's, Morrisons and Asda) are suffering at the hands of the German upstart. Here in Poland too, Lidl is becoming increasingly popular, as any conversation with other shoppers will confirm.

What's the secret of success? Turning a negative (no continuity of supply) into a positive (be surprised, indeed delighted). Good category managers with a sharp eye for a bargain.

If shoppers at the established supermarkets are like farmers, expecting regular supplies from the field or the granary, Lidl shoppers are like hunters, seizing the unexpected opportunity.

Lidl's Deluxe own-brand deli products are amazing - not only on account of their low, low prices, but because the stupendous quality. Take for example the recent appearance of an 850g pack of Parmigiano Reggiano - matured for 30 months, not the usual 15 - in a large, wedge-shaped cardboard box and including a special cheese knife. Priced at something unbelievable, like 59.99 złotys (just over a tenner). And taste-wise - this is the best Parmesan I've ever tasted. Trouble is, they're all gone. Disappeared. Sold out within a few days.

Below: a small selection of Lidl's Deluxe range, including stuff like Tortelloni al Nero di Seppia con ripieno al Salmone.

The Deluxe shelves expand in the run-up to Christmas and Easter; the 24.99 złotys packs of pate de foie gras will disappear before long. If you see something you like, and the price is good, and the sell-by date is long, buy, buy, buy.

It is by putting in high-end products (such as the famed Chateau Talbot wine for 200 złotys, the appearance of which on Lidl's shelves made national news) that Lidl draws in the discerning middle-class foodie. I mentioned the Beefmaster steaks (these are now also available in Biedy-Biedronka too), and the Roquefort. The chleb drwalski (Dr. Walski's bread) is wholesome, nutritious and tasty, the organic bananas are tastier (and yellower) than the fruit offered in Auchan; the own-brand nuts (walnuts, Brazil nuts, pistachios), are good and inexpensive.

I'm also a fan of Lidl's unbleached, uncoloured, unperfumed Eco toilet paper. OK, it's not whiter-than-white, it doesn't smell of spring meadow nor does it have roses printed on it, and its greyness does nothing to visually enhance your bathroom. But it is better for you long term. One doesn't want to go rubbing all those chemicals into one's posterior on a daily basis. Germans are very fussy about their bottoms.

Another Lidl peculiarity is lack of shopping baskets. There are trolleys, yes, though these don't take 2zł coins (only 1zł, 5zł and €1 coins accepted). But if you want to do a small shop, the convention is to help yourself to a cardboard box and to use that instead of the basket.

With its off-beat, quirky image, its ability to surprise and delight the shopper, Lidl is winning the hearts and wallets of shoppers wherever it appears. But it will never become mainstream. Lidl could never become the dominant supermarket brand, unless it changes its strategy.

Over the three years its been here, I use it regularly, but my big weekly shop is still done at Auchan. My spend there is lower (maybe even 40% lower) than it would have been had Lidl (and indeed Biedronka) not appeared in Jeziorki. At a pinch I could live without visiting Lidl, but I could not live without Auchan. Having said that, I could not shop at Auchan without use of a car, but for regular fresh-food top-ups, Lidl and Biedronka are both within easy walking distance (1km).

Auchan has a far wider range, and - although sometimes it stops stocking things I've hitherto bought regularly there - it can boast around 95% continuity of supply, in terms of stuff I bought a month ago and want to buy again. At Lidl it can be as low as 35%. The other week I popped into Lidl in search of four items, none of which were there (Nixo mackerel fillets in sunflower oil, green seedless grapes, Plan de Dieu Burgundy wine and Wensleydale cheese). I left the store empty-handed. Big fail.

The secret of successful shopping at Lidl is to be prepared to be surprised. The UK marketing campaign for Lidl - 'Join the Lidlers' has created the verb 'to go Lidling'. This means "to rummage around looking for a pair of matching cycling gloves discounted from 30zł to 6zł". It means to keep an eye open for the weekly Lidl newsletter telling you that next week will be Mexican week and that crispy tortilla shells will be on sale from next Monday until stocks run out. The Lidl newsletter will inform you that AC-powered air compressors, hedge-trimmers, motorcycle helmets, leather wallets, deep-fat fryers, shower-cabin de-fungifiers and digital compost thermometers will appear, and then disappear unless you're quick enough to hunt down the bargain.

Lidl can therefore only take a complementary role in the food retail landscape. Being surprised and delighted is all well and good, but the regular supply of staples at a consistent price is more important to consumers.

Follow-up, June 2015: The Deluxe promotion is gone and long forgotten. Other than bio bananas and Eco toilet paper, I've few things that draw me into Lidl. If the shop could keep Deluxe going the year round, it'd have me in there more often.

This time last year:
Should schools be teaching language - or Languages?

This time two years ago:
More moaning about Karczunkowska's pavement deficit

This time three years ago:
Architectural detail from Edinburgh

This time four years ago:
Spring explodes in Jeziorki
(+18C! Today it's around zero and snowing!)

This time five years ago:
Along the way for Warsaw's southern bypass

This time six years ago:
Quintessential Warsaw vista

This time seven years ago:
Jeziorki on Google Earth

This time eight years ago:
Okęcie airport, our near neighbour


AndrzejK said...

I am trying an experiment on Monday which is produce three corse meal for three using only products bought from Lidl. So this morning I went to Liddle in Konstancin and did the shopping. This included a fresh 2 Kg duck for not a lot more than biała kiełbasa, some charcuterie and cheeses from the Exclusine range, fruit and veg, cream, salted (yes quite a find) butter and two puddings. Plus two bottles of wine. The whole bill came to just over 100 PLN.

I have only started using Lidle recently. There is an up side to the stock out/ continuity of supplu issue. Which is NOT planning what to cook and then buying the ingredients but seeing what is on the shelves and "composing" meals around what is available.

Oh and I can recommend the South Afrian Pinotage red wine at 11.99 PLN the bottle.

I am not sure if I read correctly but apparently Lidle has gained 4.9% of UK grocery market!

Oh and a very strange report that house prices in the UK are much higher in areas where there is a Waitrose with a conclusion that having a Waitrose near by increases property values. But maybe just maybe Waitrose look for sites in more affluent areas? So much for the quality of current journalism.

Anonymous said...

"The chleb drwalski (Dr. Walski's bread)", really? I'd translate it rather as "the lumberjack's bread"

Michael Dembinski said...

@ Anrdrzej K:

The Waitrose/property price report showed that after a new Waitrose opened, house prices rose, though proving cause and effect in this case is difficult to say the least. Lidl's South African Pinotage has been my cheap plonk choice for ages!

@ Anonymous:

Yes of course; 'Dr Walski's bread' is a joke, a play on words. It's how the bread is referred to in our household.

AndrzejK said...

I can report that the Lidl experiment was a 100% success.

Michael Dembinski said...

And where else can you find a bottle of 2011 St Emillion Grand Cru Bordeaux for just 29.99zł?