The champion of US discount supermarkets, Aldi, may be getting some serious competition,
and it's coming straight from their home country.
In 2017, German grocery chain Lidl announced they were taking a run at the American grocery
market with a major expansion.
So, who are they?
At the time Lidl tried to break into the US market, they already had more than 10,000
stores across 28 countries.That's plenty of time to figure out what works and what doesn't
but strangely, if you stop into any of Lidl's original 53 American stores, they're almost
nothing like their European counterparts.
In Europe, Lidl stores are incredibly streamlined.
Their products are about 90 percent their own private label, and they have an average
footprint of only about 10,000 square feet.
They only stock between 1,000 and 1,500 products, keeping their overhead low while still carrying
all the basics customers need.
Lidl USA stores were built to be about twice the size, and they carry an average of about
four times as many products.
That means they're not just bigger, but they're more expensive for Lidl to operate and saddles
the company with a higher overhead.
That may at least partially explain why they've opened fewer stores than they planned.
When Lidl first opened in the US, they were in the country for about two weeks before
they were handed their first lawsuit by rival grocery store Kroger.
Welcome to America!
The lawsuit focused on a perceived trademark infringement which Kroger claimed would lead
to brand confusion.
Lidl's house brand, Preferred Selection, was too close to Kroger's brand, Private Selection,
they said.
Kroger also claimed that the confusion would give Lidl an unfair advantage as customers
would think the two were related.
Lidl was having none of it, stating,
"Kroger is using this lawsuit to try to: disrupt the on-going launch of a new, emerging competitor
that offers consumers high-quality products at far lower prices…by painting Lidl as
a copycat, when in fact Lidl is a decidedly different and (better) grocery experience."
Only a few months after the lawsuit was filed, Supermarket News reported that the case had
been dismissed with prejudice.
Lidl has a reputation for being rough on their employees.
Just how rough?
There was an entire book written on Lidl's offenses.
It's called The Black Book on Lidl in Europe, a compilation of stories told by Lidl employees
and collected over the course of two years.
According to numbers from The Independent, Lidl employed around 151,000 people when the
book hit in 2004, and more than 200 stores were implicated.
There was some seriously dark stuff in there, and a number of workers spoke about what one
shop workers' trade union called, quote, a "climate of fear".
According to the accusations that the book collected, Lidl workers were required to start
working before their shift started, amounting to countless hours of unpaid work.
Workers who didn't meet outrageous standards were often accused of theft and forced out
of the company, and management was tasked with searching employees and their personal
property to make sure they weren't stealing.
Bathroom breaks were reported to be a luxury not always given, and one former cashier even
said since she wasn't allowed to leave the register, with disastrous, and humiliating,
results.
Later, when purchasing agent Robin Goudsblom spoke to the media, he admitted they'd made
some mistakes, saying
"We are not a perfect company.
We also have a lot of room for improvement, especially [in] the way we treat employees."
"Good luck with your layoffs, alright, I hope your firings go really well."
"Kay."
"Thanks a lot."
According to The Guardian, the first choice for naming the chain just couldn't happen.
That's because it translates in English to "The Black Market," a term most commonly associated
with business that is less-than-legal.
It was decided store co-owner and retired schoolteacher Ludwig Lidl would be paid for
the rights to use his name for the store.
You might think he struck it big and could retire secure in the knowledge his name was
plastered all over a multi-billion-dollar company, but you'd be wrong.
According to Bloomberg, Lidl was given 1,000 deutschmarks for the use of his name.
When the stores opened in the 1970s, that was around $500.
Also according to Bloomberg, Lidl boss Dieter Schwarz was worth $22.7 billion in 2018…give
or take.
Lidl's head, Dieter Schwarz, isn't just super-private, he's so private The Guardian says there are
stories suggesting he once turned down an entrepreneurial award because he didn't want
to have his picture taken.
It's unclear whether or not that's true, but we do know there are only two confirmed photographs
of him in existence, and one's in black and white.
That's pretty impressive in today's technological era, and not surprisingly, there are plenty
of rumors surrounding the man.
In 2010, one German media outlet tried to get a closer look at his life, and found that
he was so unrecognizable even in his hometown of Heilbronn that he could walk through the
streets without anyone knowing who he was.
In their attempt to put Schwarz under a microscope, they found hints at secret addresses for his
office, pastors who stayed mum about rumors that he occasionally preaches from the pulpit,
and whispers of charitable projects funded by a mysterious benefactor who insists he
goes unnamed.
They were stonewalled at every turn, and said the entire city seemed curiously quiet when
it came to the billionaire businessman.
Lidl isn't just about selling all your grocery basics at a low price, they're also about
saving the world.
Sort of.
When it comes to what they define as "quality," they're not just talking about taste and price:
they're also looking at sustainability.
Take seafood, for example.
They've made a promise that all the seafood you'll find on their shelves is either responsibly
farmed or certified sustainable, and they partner with the Marine Stewardship Council,
the Aquaculture Stewardship Council, and the Global Aquaculture Alliance to make certain
of it.
There's a whole slew of certification labels you'll see on their products, including the
ever-popular USDA Organic labels and the Non-GMO Project label.
Then, there are also products that are produced in partnership with the Rainforest Alliance,
the Roundtable on Sustainable Palm Oil, and Fairtrade International.
Those little labels mean a lot!
Then, there are individual products.
Their honey has been certified by True Source Honey and is completely traceable, and their
olive oil is independently tested and confirmed as the real stuff before it hits the shelves.
Plastic is a huge problem, and there's tons and tons and tons of it filling the planet's
oceans.
According to Greenpeace, a huge amount of the plastic we throw away in our everyday
lives comes from grocery stores, and that's why senior oceans campaigner Louise Edge praised
Lidl's announcement that they were going to be getting rid of single-use plastics in their
UK stores.
To be more specific, the plastic they're getting rid of is the black stuff, especially trays.
That tends not to be recyclable, as sorting machines can't see it.
In September 2018, Lidl said they were starting with the plastic that comes with fruit and
vegetables, then will be moving on to meat, poultry, and seafood.
They added that it would make a huge difference, and say they expect to see a reduction of
waste by about 100,000 pounds each year once the transition is complete.
They say that's just the beginning of plans, and customers can expect to see more changes
down the road, like making 100 percent of the packaging on their private label brands
either widely recyclable, able to be reused, or designed to be refilled.
"While you're out there destroying the earth, I'll be saving it, and history will remember
me."
Lidl carries a ton of their own, private label products, and that allows them to sell things
incredibly cheap.
While customers might love the low prices, there's a dark side to all those cheap foods.
In 2015, farmers in Northern Ireland blockaded a Lidl distribution center in protest over
the price of milk.
Essentially, Lidl was selling milk as a loss leader, which meant it was a product so cheap
they wouldn't make money on it, but it would get customers in the door and spending money
on other products.
Since they and their competitors were selling milk at a third of the cost it took dairy
farmers to produce it, farmers were calling foul and saying the discounter was essentially
forcing them out of business.
It's not just milk, either.
In 2016, farmers were protesting in Dublin over the cheap prices Lidl and Aldi were using
to sell their produce.
Those cheap prices were such a big deal they were changing the market norm, and was making
it impossible for farmers to produce fruit and veggies while making ends meet.
Those cheap vegetables?
It turns out that someone has to pay the price.
If you like supporting charities with your purchases, there are a few partnerships Lidl
has already made in the US to continue a tradition they've already established in their European
stores.
In 2018, Lidl learned that 15-year-old Virginia resident Eric McKay was a huge fan of their
peanut butter.
After he tweeted them, they told him they would hook him up with a lifetime supply if
he got 72,000 retweets.
He did, and they did…but the story doesn't end there.
Not long after he got his first pallet of peanut butter, the government shutdown happened.
McKay's father was a federal worker, and the family knew many impacted by the shutdown.
When Lidl found out that he was going to help families by giving away some of his peanut
butter, they reached out to him again.
The result?
In April 2019, they kicked off an autism awareness campaign that featured special jars of peanut
butter with McKay's picture on them.
They've also done different partnerships in different countries.
In Germany, for example, they launched a mineral water and dedicated a portion of the sales
to the German branch of SOS Children's Village, while in Ireland, they announced a three-year
partnership and massive pledge to the youth mental health charity Jigsaw.
Lidl made their fortune in the grocery business by advertising limited-time, weekly deals
on other products they scored big on.
They've branched out, though, and in 2017 they announced they were going to be partnering
with Heidi Klum for their own affordable but fashionable clothing line.
Klum's Lidl line is her first complete fashion line, and Klum has said it's the combination
of Lidl's international reach and reputation for affordability that means it's a perfect
market for her.
Is having a clothing line in a discount grocery store a little unconventional?
Yes, but she's psyched to have her clothes on sale at a store that's mostly known as
a supermarket.
She's said:
"I'm proud to have a range in the supermarket; I wanted to put it in everyone's faces that
we are in a supermarket."
They've even staged full-fledged fashion shows that celebrate their grocery store connection,
and it just goes to show that you can be fashionable and budget-savvy at the same time.
So, when you have the option to choose between Aldi and Lidl, what are the practical differences
you're going to see when you walk into the stores?
They may both be all about the bargains, but there are some major differences.
While European Lidl stores have the same coin-operated shopping carts Aldi does, they aren't doing
that at their American locations.
Also, Lidl stocks some name-brand types of alcohol, while Aldi is strictly private label
in that department.
Prices were comparable at both stores, and the stores even have similar looks.
While Lidl has struggled to make a break into the US, Aldi has had some serious success.
But when it comes to customer loyalty, Lidl might just take the cake.
Marketing surveys have shown that customers actually rate Lidl more favorably than they
rate Aldi, and that's a huge deal.
Lidl scores higher in things like price, freshness, and quality, and surveys have also found that
about half of Aldi regulars also shop at Lidl.
Lidl is also a bigger hit among shoppers in the 18 to 24 age bracket, so is it possible
that Aldi has some competition sneaking up behind them?
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