German discounter Lidl is celebrating its fiftieth anniversary this year: in that period, the chain grew from one store to a network of 12,000 stores in 32 countries. The discounter celebrates its birthday exuberantly in its home market, but also faces major challenges.
International growth
Lidl opened its first branch in 1973, in Ludwigshafen-Mundenheim. Today, its 400,000 employees realise sales of more than 100 billion euros. Over the past decade, that turnover even doubled. In Germany, the discounter now employs more than 100,000 colleagues.
Continuing that success story is the big challenge for the retailer, which now achieves two thirds of its turnover outside of Germany. Almost the whole of Europe is now covered, but American expansion is slow. International growth is therefore slowing down a little, according to the latest figures, but the discounter is gaining market share in most countries and margins are holding up. Digitisation is a challenge: the Lidl Plus app is being rolled out in more and more countries, but ordering food online or having it delivered is not yet an option for Lidl customers.
True to discount DNA
Typical of the company is a strong penchant for vertical integration. The retailer has its own production units for things like pasta, coffee, confectionery and bread, and has even established its own shipping company (Tailwind Shipping Lines) to control its supply chain and high container costs. The discounter also stresses that acting responsibly is an integral part of its corporate philosophy and recently promised to expand its conscious food offering, with more plant-based products and the gradual introduction of the Nutri-Score.
In Germany, Lidl is celebrating the anniversary with strong promotional actions and a major campaign under the slogan “50 years more than cheap”. “We have always stayed true to our discount DNA. For 50 years it has been our claim as a reliable local supplier to offer our customers excellent quality, freshness and a wide variety of everyday products at the usual favourable Lidl price,” said Christian Härtnagel, CEO of Lidl in Germany in a press release.
