Discount Retail Chain Lidl Netherlands (owned by the German Schwarz Group) has one in ten Dutch people shopping at their stores. This makes the market share of the discounter almost double that of Aldi, that other low-cost supermarket from Germany.
Over the past fifteen years, Lidl has steadily increased its market share, from nearly 5 percent in 2008 to more than 10 percent today. What is the secret of the supermarket chain, which was founded in 1973 by Dieter Schwarz? These 6 ingredients explain the success of the Lidl formula.
1. Provide an affordable appearance
It takes some getting used to when the Netherlands is introduced to Lidl in 1997. That year, the German chain opened branches in Uden in Brabant and Vriezenveen in Overijssel. It is a supermarket as we do not yet know it in our country. Yellow floors, no expensive brands and products sold out of boxes.
By which Lidl means: by doing your shopping here, you are cheaper. After all, those who present themselves as a cheaper alternative do not wear expensive clothes.
Market share of supermarket chains in the Netherlands (2022, NielsenIQ): Albert Heijn 37,0% Jumbo 21,5% Lidl 10,1% Plus 6,8% Aldi 5,4%
2. Use the power of simplicity
Are you looking for peanut butter at Albert Heijn? There is no lack of choice. The retailer has almost thirty different brands, flavors and quantities on display on the shelf. Lidl, on the other hand, keeps it simple and comes with only two options: with and without nuts. No fuss, no fuss.
It is a strategy that you see in almost all product groups. This makes shopping clear for the customer, but also beneficial for Lidl itself. Think about it: at Jumbo they deal with a range that consists of more than 30,000 products. Lidl has less than 3,000.
This makes the company agile and ensures greater efficiency. For example, organizing the product flow is a lot less complicated.
3. Provide surprise in the assortment
If we just talked about the power of simplicity, that does not mean that you will never be surprised at Lidl. That's what the formula does with products you don't expect one-two-three in the supermarket. Massage cushions, for example. But also cheaper laptops, vacuum cleaners or a pan set.
In every edition of the action brochure, these kinds of striking non-food items are used. Lidl does this again with its own brands. For example, there is the Parkside budget drill, which was tested best by the Consumers' Association a year and a half ago.
4. Show off a product champion
Lidl has been voted best supermarket in fruit and vegetables by GfK ten times. Photo: Lidl
Anyone who starts a new supermarket today will receive the same advice for almost every retail expert: A-brands are needed to get traffic on the shop floor. Lidl did without it for almost twenty years, although a handful of well-known names such as Croky, Red Bull and Dr. Oetker have now been added to the range in the Netherlands. But the formula still relies heavily on its own private label.
What do you do then? Making sure that there is at least one important product category in which you excel, in order to convince any doubters. That eye-catcher for Lidl became fruit and vegetables. GfK rated this department as the best in the Netherlands ten times (although Nettorama dethroned Lidl in 2022). That created confidence and a lot of curious newcomers to the store food.
5. Fully commit to sustainability
In retail land it is now known, but for the average consumer it may be new: Lidl is the most sustainable supermarket of all the major players.
For example, there are now 442,100 square meters of solar panels on the roofs of the 000 branches. More than 95 percent of the residual flows are reused, including the boxes on the shelf. Fruit and vegetables are no longer flown in and most vegetarian alternatives are now cheaper than meat.
Moreover, Lidl was the first supermarket with waste-me-not stickers. Are products almost over the date? Then they can leave for 25 cents. For meat, fish and vegetarian 50 cents applies.
Without Lidl, a company like Kipster (winner of the Challenger50 award in 2019) probably wouldn't have existed. The animal-friendly chicken farm found a partner in the supermarket who signed up for five years of guaranteed sales. Consider for a moment that the concept only existed on paper at that time. Not a single climate-neutral egg had been laid.
6. Make bold choices
That partnership with Kipster can rightly be called a bold choice. And Lidl has a hand in that. Deciding things, not because the law requires it, but because you feel that the time is right.
Another good example is the tobacco ban. The government announced in 2022 that supermarkets will no longer be allowed to sell cigarettes from 2024. Lidl said as early as 2018 that it would ban tobacco from the shelves, far ahead of the troops. Since the beginning of October 2021, no cigarettes are available in branches of the retailer.
It's a good example of moral leadership. Moreover, these kinds of tough choices fit in with Lidl's strategy, in which it wants to make a sustainable and healthy lifestyle accessible and affordable for everyone.
See here for more: Lidl in the Netherlands: 6 reasons why the supermarket is successful (mtsprout.nl)
