Lidl and Aldi Going Upmarket

This feature from PLMALive! Judith Kolenburg takes a look at Aldi and Lidl.

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Report from Europe: Lidl and Aldi Going Upmarket

While retail competitors wait to see how the battle between Aldi, which has been doing business in the U.S. for forty years, and Lidl, which will be opening its first stores in America in a year or so, will play out, there may be some clues by looking at what these two discount giants are doing here in Europe.

The answer is going upmarket and trying to attract wealthier shoppers. Typical of this trend was Lidl’s launch of a new concept store in Ireland with a brand new architectural design and spacious layout incorporating a bigger warehouse, wider aisles, as well as improved staff and customer facilities. A month later, Lidl opened a Store of the Future in the UK.

The discounter is trying to attract upmarket customers with deluxe food ranges, a revamped wine cellar, and a consumer-friendly environment that includes customer toilets and even baby changing facilities. The stores also have self-checkout possibility and the tills are made longer so that customers can more easily pack their groceries. The aisles are wider and there is a lot of glass which makes the store look lighter.

In Italy, Lidl’s pilot stores in Verona set the standard with an optimized range including very Italian products under its own Italiamo brand. And in addition to the more pleasing appearance of the store and extra services, the store also has generous social rooms and even a private training room for staff.

In Germany,  Lidl opened a new generation of stores in 2015, too. In Düsseldorf, in-store communication focuses much more on value than on price. Lidl highlights choice, quality, product ingredients and freshness and uses expert endorsed quality wines which it has given a significant amount of space in-store.

At the same time, we see that Aldi that has been renovating most of its stores already, is now increasing its famous limited range to include more and more products. Aldi has lately been emphatically working on the organic range and increased the total organic offer, part of which are fresh articles. Recently, Aldi added Fairtrade products under its own brand name Fair at Aldi to the range. In Germany, Aldi Nord massively expanded the “Gutbio” private label from controlled organic production and also includes regionally available articles to the standard range. In May, Aldi Nord inaugurated the first free charger point for electric vehicles with energy from solar panels installed on the building, so that customers can replenish their vehicle for free while shopping.

These changes in store layout, facilities and assortment may not play out in the same way in the U.S., but anyone who thinks that Aldi and Lidl will concentrate on lower-income shoppers will be in for a surprise.

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.