21.06.2018
Lidl's produce department eats into other retailers' sales

Living with Lidl? Be prepared, not afraid. Grocers are being challenged at every turn. The online pressure from Amazon has been well documented. There is also the brick-and-mortar threat from discount chains such as Lidl.lidl

While grocers should not ignore Lidl’s presence, they don’t necessarily need to fear it either. According to a recent study by Catania, when a Lidl store opens in a particular market it does initially negatively impact area retailers’ sales. Quite often, however, those sales are recaptured.

The study, Defending Supermarket Share When Lidl Comes to Town, found that store dollar sales decreased 4.3 percent in the first 16 weeks of Lidl’s presence. The greatest decline was in the first month when dollar sales decreased 6.8 percent. Month two saw a decline of 6 percent. After that decreases in months three and four were only 2.7 percent and 1.9 percent, respectively.

The report noted that among the factors drawing customers to Lidl were fresh and low prices in the produce department. In fact, 60 percent of the Lidl impact was driven by produce, beer and wine. Produce accounted for 33 percent of lost sales, more than any other department.

By age, younger adults showed slightly higher sales losses then the average, a decline 4.8 percent over the course of 16 weeks. Seniors 65 and above showed significantly lower impact, down just 3.5 percent. The highest impact was seen in consumers aged 35-44, with a decrease of 5.1 percent.