Initially founded 1930 as a wholesaler
First stores opened in Germany 1973 and by 1980 became a dominant brand within its
Expanded into the UK market in 1990
Objectives for Lidl and future developments to meet these objectives.
Lidl has developed a number of objectives as they have expanded into new markets due to the constant need to adapt the business to best fit its clientele. However as the mission statement suggest the primarily goal is to “provide top quality goods at the lowest possible cost”. This business model has been very beneficial for Lidl expansion into the UK market as shown by the drastic 18% annual growth in Lidl market share over the last few years. The success of the discount retailer is also shown by Lidl primary competitor Aldi who still has a higher 30% annual growth. By focussing on trying to minimise the cost to the organisation Lidl is able to minimise cost using cost cutting measures such as outsourcing there distribution networks, thus allowing them to pass savings onto the consumer whenever necessary. However with the recent push towards top quality products will has ultimately increased Lidl’s market share as now can target a larger segment of the market. The push to quality is shown by the implementation of the new bakery role out into all the stores which is estimated to increase a singles stores turnover by up to 30% in the first year. This is also shown by the implementation of the freshness coordinators put within each of the stores to monitor the quality of the fruit and Veg. This again is follow suit to the horsemeat scandal that affected a large proportion of high street retailers.
Customer and Clientele
When Lidl first entered the UK market the primary customer base was often lower income families due to the low cost of the products and the minimalistic approach used throughout the supply chain. However as I stated previously the recent push to increasing the quality and bettering the customer experience through increasing the variety of products available will allow them to develop into newer markets such middle class families who want to save money due to the impact of rising food prices. The impact of the recession and the steadily growing brand awareness for Lidl through the increase in the number of stores located within the UK and also the recent marketing campaign into both TV and radio advertising will gradually change perspectives that Lidl is low quality and sells only foreign brands. However from what I have seen Lidl has a very loyal customer base suggesting the issue with gaining more customers is with getting them to visit the store at least once to change their perspectives of the company. The influx of customers could also have been influenced by the recession and the increasing price of necessities such as gas and electricity ultimately.
As most retailers Lidl primary money maker is its food and drink due to its low cost and loyal customer base. The brands Lidl stock are typical market leaders such as Heinz and Walkers due to their popularity however what distinguishes is Lidl use of foreign brands in the UK market for example Lidl will place Walkers crisps directly next to Crusti-Croc which is the European equivalent however cheaper than the market leader brand. This business model is interesting as it allows consumers the variety where they can choose between well established brands for a higher price or the cheaper alternative and this is very beneficial when a large proportion of the customers are European. Also Lidl has branched out into non-food goods within its portfolio as shown by their weekly deals which are seasonal to gain maximum sales for the store. By diversifying their product range from primarily food which each product has a relatively low profit margin they can increase store turnover and be seen as a brand that can tailor its products to specific markets to gain a larger…