Two recent studies show how Lidl is affecting the competition, and how the retailer is taking hold with customers.
In a study called “Defending Supermarket Share When Lidl Comes to Town,” Florida-based Catalina, which claims to have the world’s largest database of shopper history, examined shopper behavior at 83 supermarkets within three miles of 30 Lidl stores that opened last year. The study found that although Lidl siphoned sales and customers from area grocers, these supermarkets recovered much of the losses after only a few months.
According to the study, established grocery stores initially lost, on average, 4.3% of sales and saw declines of 5% in customers and 3.6% in shopping trips after a Lidl opening. However, theses losses decreased over time.
“While Lidl had a significant effect on competing supermarkets during the first two months after its openings, that impact declined precipitously by the third month, as many trial Lidl shoppers returned to their past shopping behavior,” the report said.
However, a survey conducted by global consulting firm Oliver Wyman showed that 48% of customers who tried Lidl are now shopping there on a regular basis (more than twice per month). And the survey concluded that shoppers aged 18 to 34 had a particularly high awareness of Lidl and shopped there frequently.
“What Lidl has done so far has struck a chord with younger consumers who are valuing Lidl’s good private brand product quality almost as much as their low prices,” said Tanja Ebner, principal in Oliver Wyman’s retail and consumer goods practice.
The study also concluded the following:
- Forty-six percent of Lidl customers said their primary reason to shop at Lidl was either good quality, good promotions, or fresh products. Thirty-nine percent cited low prices as their primary reason.
- Satisfaction is higher in states Lidl entered recently, as opposed to those it entered earlier, which means Lidl may have learned important lessons from earlier openings and has made adjustments.