My repertoire of Lidl stores has been exponentially improved with the recent opening of a lovely new unit in South Ruislip, meaning that I’m less reliant on the recently extended and refurbished store in Wembley and the outlet in Pinner, which is a nice enough store but has a very annoying multi-storey carpark and the slowest lift in Western Europe.
There was a good article by Reuters over the weekend which reflected my view that the discounters in the UK have only just scratched the surface in terms of store numbers and market share – a doubling of market share to around 25% is the working assumption of a couple of Big Four supermarkets I’ve spoken to on the subject. The article noted that Lidl reckons it can reach potentially 1,200 to 1,500 stores in the long term, up from 710 at present, and that the current year will see it spend £1.5 billion on the opening of 50 new units and 30 remodels.
Reuters also noted that there might be a degree of concern over the direction of travel of the discounters’ profitability in the UK and the long-term viability of their pricing models. I don’t necessarily share these concerns, such is the joy of them being private companies with a markedly different stance on KPIs and short term financial metrics.
The short story is that pretty much every store they open will be incremental in terms of market share and profitability. There are millions of shoppers around the country who would like to shop at Aldi or Lidl, but currently don’t as their nearest discount store is not near enough to make it a viable alternative. Their accelerated push into London and the southeast means a higher degree of complexity and unfamiliarity for them (welcome to the world of odd-shaped buildings and leasehold properties), but also means that certain supermarkets who have yet not received their fair share of punishment from the discounters will shortly be feeling more pain too.
I popped along to the South Ruislip store over weekend, and very good it is too. It’s located on an elongated retail park with plenty of car dealerships and non-food retailers as well as a pretty big Sainsbury’s. Just around the corner is a B&M and an Aldi alongside one of very few new Asda superstores. On a bit of land that used to be home to a Comet (six years since they shut) stands the new Lidl, which includes many of the ‘store of the future’ features that I recall from Rushden, such as toilets, self-checkout, the new look and feel and the more elegant bakery fixtures.
The store is about 18,000 sq. ft. and feels veritably cavernous compared to other Lidl outlets. Plenty of light means that the atmosphere is much improved and the instore graphics, including nice welcome and thank-you messaging together with icon-led wall graphics, mean that navigation is very good indeed. Mention should also be made of the store’s environmental features – including a digital screen at the store’s entrance that depicts how much electricity is being generated through the store’s solar panels. Good stuff.
There is a nice treatment on seasonal and premium lines at the entrance of the store, before one ploughs into bakery and produce. Fruit and veg. merchandising clings on to the more rudimentary aspects of Lidl’s DNA, plenty of stacked boxes here, but on the whole the merchandising (reliant, as ever, on pallets, SRP and FSDUs) is more than adequate. Booze is a highlight: a cracking range of beers and ciders is complemented by an awesome wine range, including the ‘Wine Tour’ selection of limited-time wines from around the world – a feature I’d not seen in other Lidl stores before.
A lot of the extra space has been devoted to non-food specials. While this means that the range has both breadth and depth, I’m not sure that the citizens of South Ruislip are going to get through about four bays of Singer sewing machines anytime soon, so perhaps a degree of recalibration might be required to finesse the allotment of both space and supplies.
The store was dripping with Union Jack imagery and plenty of credentials relating to UK sourcing. 70% of the core range is sourced in Britain so such claims are more than justified and I also liked lots of the other messaging around the place, like the sign that read “we are committed to the highest possible standards … yours”.
Having completed a fairly chunky trolley shop (which, sadly for Lidl, didn’t include a sewing machine), I approached the checkouts with my usual fear of a hefty queue and what can be the passive-aggressive attitude towards idiots like me who can’t pack fast enough. However, thanks to well-staffed tills and the new dual-lane checkouts, my shopping was scanned through at an alarming pace, but I had my half of the checkout to pack stuff into my bags while the next customer was having their shopping processed. A simple, but significant improvement.
Stores of this calibre, and plenty more of them, will see Lidl’s incursion into the UK grocery market grow even more problematic for the incumbents. No-one can say they didn’t see it coming…
Bryan Roberts, Global Insights Director