Monday, November 30, 2015

Lidl Ready To Conquer The US Market

Costco is coming to Europe? European are coming to the US! Indeed, this is a very important news for the retail world. As much as the arrival of Costco in Spain and soon (hopefully) in France, Lidl projects to enter the US competition starting in 2018.
Lidl is aiming to open mostly on the east coast, but also including some locations in California. Thanks to its business modell based on small and cheap stores to open, they can spread the country fast, with low investment.

In fact 200 people are already working on the development plan of the German company.

Lidl has evolved a lot lately, trying to be considered as a more modern actor of the retailing world, by enlarging their product ranges, adopting massive commercial campaigns, having more national label in store, and focusing more on the fresh products.

I believe there are clearly similarities in the two projects. 
  • Both have unique concepts, based on low prices, but with different tools in terms of business models.
  • Both have large investment capacities due to their size. They are both in the top 5 of the brick & mortar retail rankings.
  • Both companies are facing a new kind of competition landscape: Mature businesses with already strongly founded retail concepts. In Europe, hypermarkets like Tesco or Carrefour. In the US, the tycoon Walmart. But this is actually also a great opportunities as it gives free space to specific concept far from those ones.
Now, negative people will tell you that Americans already have a wide range of choice in terms of retail, that at the digital age why a hard discounter would succeed, and I don't know other skeptical comments. The same that are skeptical about Costco's success in France, the land of good food and Carrefour. But if you see what kind of competition Lidl gives to Tesco in the UK, you would maybe understand better. On top of that, both retailers are thriving worldwide with a concept that yet no one has been able to master as they do.

Of course, Aldi is already located in the US, and it has been for decades. But Lidl I believe has a stronger concept, and its arrival could change the way the retail is organized in the US. Aldi is actually having great results thanks to its original Trader Joe banner.

It will be a long wait until 2018 to see how the Americans react to the historic hard discount modell.

For those of my American Audience (actually it is my first audience worldwide) whom may not know about what a Lidl look like, you may have a look below at the video showing you how a store look like.