Aldi Nord 2019

Due to Their Relentless Expansion Aldi and Lidl have Gained a Wide Footprint, Ideal for Global Promotions

Currently, Aldi and Lidl generate growth, measured in billion dollars, that only online players achieve. Already in the global Top ten, the discounters will climb up higher in the rankings. This has major implications for suppliers, competitors and the wider industry.

Aldi/Lidl are the only grocery players expanding with bricks and mortar (especially when taking an international perspective). Their new store locations are moving into convenience/inner city spaces, arguably the right future format.

As competitors build out their online offerings and invest, Aldi and Lidl attack their b&m proposition, from which the competitors fund their digital transformation. This increases their competitors’ margin pressure and leads to overall price deflation in the wider market.

What does this mean?

As the industry becomes more concentrated and consolidated (M&As, bankruptcies) for suppliers only a number of key accounts will be left standing (big 4/big 3, etc). The more this happens the more influential the discounters
become as an alternative route to market.

As Aldi/Lidl lose the cheap and cheerful tag, shopper perceptions change. This is pushed further along by the discounters’ move to quality, premium private label, fresh/organics.

Due to their relentless expansion, Aldi and Lidl have gained a wide footprint, ideal for global promotions. If an FMCG giant wants to push through a promotion in the entire EU and US/Australia - the only available avenues are Amazon/Alibaba or Aldi/
Lidl due to their massive reach, and simplicity inherent in the business model. Both discounters can get the product on to shop floors at rapid speed if required (e.g. Lego promotion before Christmas).

The discounters benefit from their trading up strategies, lowering FMCG inhibitions to damage their brand perception by a listing, their excellent logistics set-ups and are also attractive to FMCGs due to them both competing against each other.

This means the discounters will become more attractive to manufacturers as a new channel (quite apart from the fact that they will guarantee massive volume sales, because of their SKU level sales).