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Netherlands: 6 reasons why the Lidl NL formula works

Discount Retail Chain Lidl Netherlands (owned by the German Schwarz Group) comes in market share after Albert Heijn and Jumbo.

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%

But where the two biggest grocery retail formulas rub close together, the German discounter is clearly playing a different game. Without fuss and with a tight focus on sustainability.

One in ten Dutch people do their shopping at Lidl. This means that the discounter's market share is almost double that of Aldi, that other low-cost discount retailer from Germany.

Over the past fifteen years, Lidl NL has steadily expanded its market share, from nearly 5% in 2008 to more than 10% 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 look It takes some getting used to when the Netherlands is introduced to Lidl in 1997. That year, the German chain opened stores in Uden in Brabant and Vriezenveen in Overijssel. It is a supermarket as we do not yet know it in Netherlands. Yellow floors, no expensive brands and products sold out of boxes. With which Lidl just wants to say: by doing your shopping here, you are cheaper. After all, those who present themselves as a cheaper alternative do not wear expensive clothes. 2. Use the power of simplicity Are you looking for peanut butter at Albert Heijn? There is no shortage of choice. The retailer has almost thirty different brands, flavors and quantities 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 categories. This makes shopping clear for the customer, but also benefits Lidl itself. Just think: 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 more 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 solder, 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 as the best by the Consumers' Association a year and a half ago.

4. Show off a product champion Anyone who starts a new supermarket today will receive the same advice from almost every retail expert: A-brands are needed to get traffic on the shop floor. Lidl did without it for almost twenty years, although the range in the Netherlands now includes a handful of well-known names such as Croky, Red Bull and Dr.Oetker added. But the formula still relies heavily on its own private label.

What are you doing then? Ensure that there is at least one important product category in which you excel, in order to win over any doubters. That eye-catcher became fruit and vegetables for Lidl. GfK rated this department as the best in the Netherlands ten times (although Nettorama dethroned Lidl in 2022). That created confidence and many curious newcomers to the store.

5. Be fully committed to sustainability

It is now well known in the retail world, but it may be new to the average consumer: Lidl is the most sustainable supermarket of all the major players. No shortage of examples. For example, there are now 100,000 square meters of solar panels on the roofs of the 442 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 don't waste me stickers. Are products almost expired? Then they can go for 25 cents. 50 cents applies to meat, fish and vegetarian.

Without Lidl, a company like Kipster (winner of the Challenger50 award in 2019) probably wouldn't exist. The animal-friendly chicken farm found a partner in the supermarket who signed up for five years of guaranteed sales. Remember for a moment that the concept only existed on paper at the time. Not a single climate neutral egg had been laid yet.

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 stores of the retailer. It is 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.

The history of Lidl If your name is Dieter Schwarz and you want to set up a chain of affordable supermarkets, you prefer not to do so under your own name: Schwarzmarkt sounds a bit too cheap. That is why Schwarz (now 83) bought the rights to the name Lidl from his partner Ludwig Lidl, in turn a member of a family that had been running a food wholesaler with the Schwarz family since 1930.

In 1973 the first Lidl opened, in Ludwigshafen. The formula, a supermarket with a cheap, limited but good range, was derived from the brothers Karl and Theo Albrecht, who had started Aldi a decade earlier and had developed into a powerhouse among the advantageous supers.

In the five years up to 1978, Schwarz junior opened about thirty stores in his own region, varying the range and formulas. From 1978 onwards, the offensive went well nationally. Lidl became the name for the group's smaller discount supermarkets, the largest supermarkets were given the name Kaufland.

Ten years later, Schwarz had 460 stores in his own country, after which the Germans moved into France, England and the rest of Europe in the nineties. The first Dutch Lidl store was opened in 1997. The offensive has now led to more 12,000 stores spread over 33 countries. This accounts for the lion's share of the 133 billion euro turnover of the Schwarz Group, which has grown into the largest retailer in Europe.


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