Lidl Cheaper?
27 July 2017
Kantar continues to impress for the discounters but Lidl are pushing along nicely once more, after a slight misfire when CEO Ronny Gottschlich left and the new German implant arrived from Lidl HQ, they've got themselves going nicely once more.
Whilst Kantar is useful, it is a little bit like comparing the performances of a team who spend lots of money in the transfer window and sweep teams aside, against a side who are newly promoted and haven't spent much and struggle along manfully.
There's no 5-0 victories but it's slow and steady progress, to an eventual 17th placed finish. Whereas Aldi and Lidl are putting teams to the sword by 4/5-0 each week but are spending (££) on stores and expansions which aids results.
Anyway. Enough mixed metaphors. We can see that Aldi and Lidl are going well and good for them, but the Lidl uprising has been surprising given the stores aren't exactly pristine. Queues generally build at the checkouts and often you're back to classic discount days of no one on the shop floor and everyone on tills.
Their Weekend Specials are popular and allow them a greater level of flexibility in the offer, driving trade at the weekend and bringing customers in to store.
Their XXL event is popular and this is a good example of where Lidl stretch the product range nicely. XXL is basically a bigger pack size of an existing product, but it drives further savings. It also keeps customers away from the likes of B&M where bigger packs can be sought too.
Bigger packs are in vogue at the minute, all the big retailers are looking at larger packs to provide value for customers, especially parents as they start to panic about feeding a small army for 6 solid weeks and making money stretch as far as possible.
Considering Morrisons are selling 90 wash Surf for £7 at the minute, the 100 wash, seemingly unpriced (store standards etc etc) Formil will likely represent good value anyway. Even without a price.
But their brand is strong; no one brands like the discounters and Formil works well here, and also in aisle with the pallet advertising branding the cases yet to be opened. Looks very smart indeed.
So big packs, big winner. Allows greater value for customers and Lidl can drop these in over the month on weekend specials which customers quite like.
The challenge with discounters can be from a marketing perspective at least, it's hard to keep the good news flowing. It's permanent good news from discounters, it's all British and we support all the local growers and farmers.
But depsite this, it's still cheap. Which can leave customers a little confused over the level of buying agreements and if farmers get a good deal.
Speaking of which, Lidl pushing on Fairtrade and UTZ certifications across their Confectionery range is no doubt an attack on Sainsbury's, who as we know have abandoned Fairtrade Tea in recent weeks and gone down a 'fairly traded' message instead.
British is another one that is everywhere, on Meat, Fresh, Produce where applicable. Even Bread benefits here with a Union Jack love heart next to their own label loaf.
School uniform was a fierce battle this year, with Lidl rolling some in the week after Aldi landed their low price offer. £1 more than last year (Brexit) though.
Aldi were also trading their wares online too and drove some real traffic to the store, with various reports of busy aisles and a scrum as customers rifled through the uniform ranges. For £5 for a full set though, it's rock bottom and as much as anything can be used as spares if nothing else.
Lidl were also in the mix and are still trading their offer through, signage externally was good too, certainly drives attention for customers and their marketing campaign is on the centre aisle and its wonderment too.
Not much left here for example; minimal stock levels but they're typically 'in and out' of these events so quickly are Lidl.
Standards can still be an issue however; this shipper is beyond belief really, and the Magazines are an area that discounters moved in to, but an area that quickly looks very poor where staff are not around to maintain.
A key highlight from this visit was the emergence of two price messages in store.
Lidl seem to running Cheaper alongside Price Cut. Presumably Price Cut is their promotional package which enables more deeper reductions around the store.
Whereas cheaper is their core value message that spreads the generally lower price message. Note the 2p cut in this image for example.
So more of the same from Lidl in a sense of their stores which continue to lag Aldi, however there is a notable step down in staff presence too which will aid the bottom line. Despite this, customers don't seem overly concerned given their Kantar figures.
But lest we forget, Kantar for discounters is fuelled by new space, and they're the only ones putting any down.......
From the Grocery Insight newsletter archive, first sent to subscribers on 27 July 2017. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.