Discount Retail Chain Lidl Lithuania (owned by the German Schwarz Gruppe) had a successful entry into the market showing that it had not only opportunities to grow, but also to change consumer habits. Experts say about the role of this retail network in the country's economy today and how its launch in the country has changed the daily lives of shoppers, experts say on Lidl's fifth birthday.
Although private brands were not necessarily associated with quality at a good price for Lithuanians in the past, when Lidl started its operations in Lithuania, customers' attitudes towards the brands of retail chains themselves changed.
According to Petras Čepkauskas, the head of the food comparison platform Pricer.lt, one of the main features of Lidl's private label brands can be attributed to: functional variants. This can be called a kind of "architecture" of private labels.
The specialist continues that in the past, in Lithuania, private brands mostly occupied niches of low-priced goods, and communication was almost non-existent.
When Lidl started operating in Lithuania, it started to mention its private brands more often and use them in various sales promotion programs. And although there was a noticeable increase in communication on the issue of quantity, the context remained similar, it was mainly about goods at a lower price level,” says the head of food business at Pricer.lt.
Provides customers with different consumption patterns
According to the expert, although Lidl often emphasizes the high price-quality ratio of its private label products, it would be a mistake to assume that the retail chain only offers this to its customers.
"It can be said that by effectively controlling its range and its presentation, Lidl is extremely fast responsive to customer needs. This is what this discount retail chain does not simply sell potatoes, bread, milk or groats, but by presenting a variety of consumption patterns that relate to customers’ income levels, seasons, functionality, lifestyle and new experiences. The emphasis on the price-quality ratio is only the initial relationship with the customer, but he later begins to evaluate not only these aspects, but also the entire Lidl ecosystem, its practical benefits,” says P. Čepkauskas.
Transparency paves the way for an important role in the market
Today's important position of the retail chain in the market is also confirmed by the fact that Lidl Lietuva has already become one of the largest taxpayers in Lithuania. STI data show that the company paid €93 mln. euro taxes, i.e. 19.2 percent. more than 2019 (€78 million).
According to Rūta Skyrienė, Executive Director of the Investors' Forum, the ability to rise to the ninth place in the table of the largest taxpayers in five years shows that the retail network has purposefully expanded and the company's sales have grown: "Such results would not be possible without initiatives such as the White Wave, which brings together honest and responsible businesses. "
During a pandemic, fair dealing is more significant
The CEO of the Investors' Forum emphasizes that paying taxes helps businesses to create a positive image in the eyes of the public, and transparency of companies is especially important in the face of a pandemic.
"Residents are increasingly concerned about the principles that companies follow in their activities. Responsible and honest activities not only allow us to show the public that business cares about the surrounding environment - at the same time, organizations also contribute to the well-being of the state. The importance of the largest taxpayers is growing even more today, when Lithuania is facing serious challenges, as the state can redistribute the amount paid for basic needs,” says R. Skyrienė.