Too Lidl Too Late?

More like too Lidl too big and too early.

Lidl

The expansion of German discount chain Lidl into US-Amerika is turning out to be less successful than hoped, to put it mildly. Sales are disappointing and the two billion euros planned to cover investment and start-up losses will not be enough. Management apparently chose too many wrong locations and built stores that were much too big. Instead of the 100 stores planned for last year only 47 actually opened.

This puzzles me a bit. You can’t walk a quorter of a mile in Germany without running into one of these places. And when I read how Lidl prices in the US seem to be just as low or lower than they are here, how could they possibly fail? Well, if they do, there’s still Aldi, right?

Die extrem jungen Expansionsteams haben in Amerika oftmals falsche Standorte ausgewählt. Zudem wurden zu große und zu teure Märkte gebaut. Die Umsätze sind enttäuschend. Die ursprünglich kalkulierten zwei Milliarden Euro für Investitionen und Anlaufverluste werden nach Informationen vom manager magazin nicht ausreichen.

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2 responses

  1. Hi,

    I believe that every new market that a company wishes to expand to represents a unique challenge even for highly successful companies like Lidl.
    Although Lidl makes it look easy, I think it has taken it years of accumulated marketing experience and careful consumer analysis, in order for it to be able to enjoy its current success.
    The U.S. market is not any different, and Lidl should follow the same long trial-and-error approach that it has applied to every single country where it operates.
    Although a low price is hard to beat, knowing local consumer tastes can be even better, and building on its relationship with consumers takes time.

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