Kantar: 'Aldi and Lidl could end up being a onetwo
punch in the US over the next several years'
By Adi Menayang, 10Feb2017
Is ALDI bracing itself for Lidl’s US arrival? Regardless, the German discounters’ stateside rivalry could put
pressure on retailers such as Walmart and Food Lion, predicts one retail analyst.
Speaking to FoodNavigatorUSA after ALDI unveiled plans to pump $1.6bn into remodeling and expanding 1,300
stores by 2020 , Mike Paglia, director of retail insights at Kantar Retail Americas, said: “I think the investment is a wise
one. When you get to be as big as Aldi (1,600+ stores) it becomes critical to keep them all fresh and up to date.
“The remodeled stores are going to look a lot like [its] new locations and they are real eye openers for the shopper,” he
said, referring to the use of sleek exposed concrete and softer lighting (Business Insider likened it to Whole Foods’ store
design ).
Adding to the cosmetic facelift, Paglia says Aldi will also stock “more high quality produce [and] ‘betterforyou’ items
throughout the store,” building on the company’s ongoing efforts to discard the ‘subpar quality’ assumptions that mar
discountpriced products and storebrands , “all while maintaining the low price image and the quick, easy, and stress
free experience.”
Watch out Walmart, Lidl is coming to town…
ALDI’s announcement comes at a time when its European rival, Lidl, has been ramping up its US operations , aiming for
first store openings on the East Coast at the end of this year (it has already set up a US HQ in Arlington VA , and is
building three US distribution centers, including a $100m one in Maryland ).
Part of the Schwarz Group, the largest retailer in Europe and one of the largest in the world, Lidl like ALDI keeps
prices low by offering a limited range (SKU count) and a strong private label offer, although it also stocks some national
brands.
So what can the US grocery industry expect when the two German giants—a bigger, badder ALDI and fresh newcomer
Lidl—continue their faceoff stateside?
“
Aldi and Lidl could end up being a onetwo punch here in the US over the next several years. Certain retailers will
definitely feel the impact more than others,” Paglia said.
“Specifically, those that are more conventional and less differentiated (e.g. Food Lion), or intensely focused on low
prices (e.g. Walmart) will probably face greater pressure than current market leaders whose value proposition helps
them stand out (e.g. Publix),” he added
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