Survey: Lidl poses big competitive threat

Consumers are very excited about shopping at German discount grocer Lidl — even though they have never set foot inside one of the company's stores before.



Lidl's upcoming entry into North Carolina, South Carolina, and Virginia could remove $1 billion in local sales in the medium term, according to a report by global consulting firm Oliver Wyman which surveyed consumers in the three states cited above. It reveals that consumers are overwhelmingly excited about trying Lidl.



Sixty-seven percent (67%) of respondents say it is very likely that they will try shopping at Lidl, and 52% are very excited about shopping there. What's more, 39% say they would shop at Lidl once a week or more in the future. The high levels of trial and intent to return as a regular shopper were driven by their expectations of high quality and innovative new products, according to the report.



"Incumbent grocers need to take notice," said George Faigen, partner in the retail and consumer foods practice of Oliver Wyman. "The threat from Lidl is real and will only get clearer as their stores generate trial and repeat sales."



Grocers who believe my customers would not shop at Lidl or Aldi will likely be surprised, Faigen added. "The U.S. and European trends we have measured over the past five years tell a clear story of consumers moving portions of their weekly shopping from incumbent grocers to these private brand retailers," he said.



Key findings from the survey include:

*Even though none of the survey respondents had ever been to a Lidl store in the U.S.



*Contrary to commonly held industry wisdom, households at all ends of the income spectrum are excited about Lidl’s store openings. In fact, 49% of households with an annual income over $75,000 are excited about Lidl compared with an almost identical 48% of households earning less than $25,000 last year.



*There was particularly high excitement from consumers around Lidl’s new product offering and their highly awarded private brands. However, being unfamiliar with Lidl’s private brands was also one of the top concerns among respondents too.



*Whether consumers shopped at traditional, specialty, or regional grocers in the past, there is a very high interest in shopping at Lidl in the future.



*Consumers who already shop at Aldi are overall more excited and likely to try Lidl than non-Aldi shoppers.