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Germany: Lidl as Aldi, business is divided into north and south and should be more competitive

Updated: Aug 18, 2022

Discount Retail Chain Lidl Germany (owned by the German Schwarz Gruppe) would like to better exploit its market potential in Germany and therefore divides its business into north and south, similar to the discounter king Aldi. This is reported by the "Lebensmittelzeitung" (LZ).

Unlike the market leader, the restructuring only affects branch support, expansion and logistics within the German subsidiary.

In terms of corporate law, nothing changes at Lidl. Purchasing also remains centrally organized.

Lidl would like to make even better use of its market potential in Germany and will in future divide sales within Germany into north and south, similar to competitor Aldi. This is reported by the LZ. Below the top of Germany consisting of CEO Matthias Opitz and vice CEO Julia Kern, the discounter of the Schwarz Group has therefore created a new management level. The regional companies in northern Germany are subordinate to the north CEO Olivia Rabys, the companies in the south to the south CEO Jens Stratmann.

According to research by the LZ, the areas of expansion and logistics as well as the support of the stores are affected by the restructuring. In contrast to Aldi, the division takes place exclusively within the German national company. There are no changes under company law and no different logos. Purchasing should also remain centrally organized.

Lidl wants to become more competitive locally

Klaus Gehrig, head of the Schwarz Group, to which both Lidl and Kaufland belong, years ago wanted to introduce a similar operating structure to that of the discounter market leader Aldi, according to the "LZ". With the division one is closer to the market and can react better locally to the competition. Many managers would have resisted for a long time. According to them, the uniform organization is responsible for Lidl being able to partially slow down its competitor Aldi.

In the course of this dispute, the former CEO of Lidl Germany, Marin Dokozic, had to take his hat off in 2018. Dokozic now works for the Saudi discounter Al Dukan, after his adventure at DIA Brazil. With Olivia Raby from Brandenburg, Gehrig has now placed a trusted manager in the north. The 32-year-old worked in close proximity to the Schwarz CEO five years ago, according to the LZ.

More growth potential in the north and east

Lidl differentiates its management at a point in time when the Aldi conglomerates are cooperating more closely, for example in online food retailing. The numbers would show, however, that Lidl has even greater growth potential in northern Germany than in the south, writes the LZ. Although business development in the north and east of the country has recently been better than at Aldi Nord, it is still significantly weaker than in the south.

And this despite the fact that there are 22 regional companies in the north. In the south there are only 17. Nonetheless, Lidl Süd grew by 13 percent in the last financial year, far better than the average growth for discounters, which is 8 percent. In the north, however, the growth rates lagged behind the market development by two percent. Lidl Süd therefore turned over one billion euros more in its core business than Lidl Nord, according to the "LZ".

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