Tag Archives: Lidl

A Little-Plus About Lidl

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A year ago, Germany-based grocer Lidl ‘invaded’ the United States. The company (whose name is pronounced leedl) originally set its initial US goal at 100 stores. That was scaled back, early this year, to 50. There presently are Lidl stores in Virginia, North Carolina, and South Carolina, with more stores pending in New York’s Staten Island, New Jersey, Delaware, and Georgia.

The up-coming stores are likely to be closer to the company’s 15,000-20,000 sq ft (1393-1858 sqm) European model, for a few reasons:

(1) The US stores, judging from the one I’ve visited (several times), are seriously trying to do too much, as almost-full-service supermarkets, than they can deliver;

(2) they dedicate 12-25% of their floor space to nonfood items that might, might, generate high enough profits to justify the company’s investment in them… but they might not; and

(3) while in-store bakeries certainly are a potential draw, Lidl’s scratch versions – as opposed to bakeries doing bake-off of frozen or otherwise- ‘almost-finished’ products, involve serious up-front and ongoing investments. And using only Europe-inspired recipes may not be as good an idea as Lidl executives imagined, because European and American tastes differ.

A company website notes that, “At Lidl, our bread and baked goods are authentic European quality and they are always oven fresh because we bake several times a day. Take a deep breath – that smell is our croissants oven-baked on site! We melt the right amount of butter, dash the perfect amount of salt, and layer each luxurious taste to be the perfect flakey bite. The baked goods are made using the original recipes and baking processes that we perfected across Europe.”

Something Lidl may never (so far) have been recognized for is the quality of its shopping carts. Beyond the now-standard area for small, delicate items, their cars feature handles that are heavier than the types usually found at US supermarkets, and Lidl’s handles have shaped, plastic grips for the user’s hands. While the carts feel sturdy, they are easy to maneuver, and seem to be constructed so as to not face the fate of so many carts: jammed or broken wheels.

The care and attention that went into designing those carts wasn’t exercised when the entry into US market was planned.

While generally some 35% larger than their European counterparts, Lidl’s US stores’ shopping areas don’t employ space efficiently. Aisles are too wide, compared to most US supermarkets; the first-in-view produce section features multiple displays of some items and, in mid-June, had no available peaches – a serious summertime favorite across the US. (Meanwhile, a roadside stand a few miles up the road from the Danville VA Lidl was offering “South Carolina Peaches”); Non-food bins, which feature ‘specials’ on Thursdays and Sundays, were empty on Saturday – a huge waste of space and, no doubt, many missed opportunities to sell something – anything.

Americans like prepared foods. Lidl doesn’t, one must assume, like to sell prepared foods, at least not in assortments Americans are used to. Oddly, one of the widest ranges of packaged foods comprises sauces destined, as per package directions, to be used to turn plain pieces of chicken into Indian-Indian – as opposed to Native American “Indians” – dishes. It would amaze me if there’s an even middling demand for Indian food in Danville, population 42,000  or so, where there’s nothing vaguely resembling an Indian restaurant or Asian food market within 40 minutes (in Greensboro, NC, of all places!).

This Lidl offers frozen Indian entrees, as well. A generous assessment assumes they must sell, because the display is always well-stocked. (Alternatively, these long-shelf-life items, prepared in Canada, may not be selling well at all – but let’s  give the benefit of the doubt and assume stock is turning over nicely!)

 

Given the amount of space dedicated to them, Lidl clearly loves to sell cookies, packaged crackers and similar snack foods: The company’s Danville store has oodles of them.

The bring-your-own–bags – or buy Lidl’s for a few cents each – system seems to be widely accepted by shoppers. (I keep a bag full of Lidl bags in the trunk of my car so when I’m in Danville, I’m prepared. On my most recent visit, a departing customer tossed me a few Lidl bags he didn’t need, so I added them to my ‘bag stash’.)

I live an hour’s drive from that store, so I visit only when I’m in Danville for another reason. So I can’t report on day-to-day traffic there. Press reports have said the company hasn’t been converting fans of other local supermarkets – of which there are not a wide assortment in Danville – to Lidl regulars.

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My visit earlier this month was either the ideal time for encountering little in-store traffic… or a portend of problems to come: There were very few shoppers, at 5:30 on a Saturday afternoon. But the good news is, for Lidl, many of the few were loading carts with well over $100 in merchandise. That’s four to five times what a press report a few months ago said the average Lidl ‘buy’ was.

I like Lidl. It employs some clever time- and cost-savers such as price-labeling your own bakery and produce items. (Walmart’s self-checkouts require one to try to figure out how some produce items are listed in the system – corn, peppers, and chilies can be problematic  — or enter the PLU code. The latter often are as hard to locate as the product-look-up system is to navigate. Not so at Lidl.

A few months ago, writing in Forbes, noted retail analyst Walter Loeb  wondered why, rather than spreading stores from New Jersey to Georgia, Lidl hasn’t focused on a more condensed area and positioned stores closer together. The current scatter-shop positioning, he noted, makes it hard for any store to have more than a very local impact.

Well, the company recently appointed a new head of the US operation, a 15-year veteran of Lidl, and he’ll no doubt put that experience to good use getting Lidl USA back on the track envisioned by envisioned by Klaus Gehrig, director of the Schwarz-Group, which owns Lidl.

On average, competitors have lowered prices more than 9% in markets where Lidl sets up shop. That suggests US consumers have every reason to hope Schwarz-Group becomes more profitable thanks to Lidl USA.

 

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Lidl Alters Stock, Prices In Danville VA Store

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The Lidl store in Danville, Virginia has been open a couple of months. It’s already made some (much needed) shifts in its product offerings. And, though staff on hand on a recent Wednesday afternoon reported business has been “good,” it was pretty slow on our second visit.

That, for the company, is the bad news. The good news is how ably they work with consumers wanting to return something – often a hassle ao competitors’ stores. On our first visit, we’d bought a device to catch and kill houseflies. It didn’t work. Despite the fact it was many weeks before we could get back to the store (it’s nearly an hour’s drive away), the return process – done at the checkout, not a consumer service counter – went smoothly… once a manager was located: That took a couple of minutes.

A bit later, at the conclusion of the same visit, we realized that a bottle of wine we’d purchased was not the one we wanted – a less than one-third the price of the one we walked out with. I immediately walked it back into the store, spotted the same manager on the floor, and he OK’d a return even though, he said, Virginia law bans the return of wine. (Since we’d only bought it moments before, and had the receipt, he reckoned the law could be ‘waived’ (read ‘overlooked’.) We returned to one of the checkouts – only three were open on this slow afternoon – and were promptly issued a store ‘gift’ card.

Back in the chilled foods section along the right wall, it was clear that someone has paid attention to the fact that people on Virginia’s Southside don’t have much interest in Indian food, as the choices in the heat-and-serve section have been trimmed (to one!) and other, similar meals have been culled, as well.

The bakery’s offerings are more numerous, and samples are more in evidence – with a lighted sign rotating through the day’s offerings.

But one of the greatest changes – hardly unexpected for a new, price-oriented store – has been the push to drop prices – an effort evident in most every department. One dramatic example: whole “young” chickens were offered at $.69 (69 cents) per pound, down from $.99 – the price of comparable birds at Food Lion, along with Walmart, a chief competitor in Danville.

(The town – a small city, actually – used to have two Piggly Wigglys and a Harris Teeter. One of the former was replaced by a Walmart; The latter simply pulled out of the market. There’s one Save-A-Lot, a limited assortment discount store. It’s so NEVER busy, you wonder why it’s still in business.)

Lidl needs to do, in this and other locations, product shifts to reflect the fact locals aren’t interested in “Cheese [or anything else] from Europe”. Most of their new US stores are in small, often rural, unsophisticated communities. The natives there don’t know (or care) about brie or other ‘specialty’ cheeses, or foods from foreign lands. But they do go for Lidls’ bakery goods, many of which – such as fresh bagels, croissants and similar pastries – are all but unknown beyond the products offered in the bake-it-yourself section of the dairy aisle.

Some reports have said Lidl isn’t doing the business it expected to in its launch stores. But as someone pointed out, the privately (German-) owned company has deep pockets, and is committed to a long term success in the US. There is every reason to put faith in that – and the fact that both Lidl and Aldi, it’s German-based cousin, which also is growing its US store count, will continue to disrupt the US grocery-selling scene for years to come.