How Lidl became a fixture in France (and how Aldi seems to emulate it)

How Lidl became a fixture in France (and how Aldi seems to emulate it)
How Lidl became a fixture in France (and how Aldi seems to emulate it)

Despite legal setbacks and a very poor reputation ten years ago, the German discounter Lidl is inexorably strengthening itself in France, betting on an uncompromising pricing strategy and a desire to change its image which seems to inspire its great rival, Aldi .

Tuesday, February 9, the negotiations which oppose each year in France supermarkets and manufacturers on prices, are in full swing. The Minister of Agriculture Julien Denormandie decides to go and probe “the commercial practices” of a sign that has been defending French farmers for several years.

Carrefour, “first private employer” in France? E.Leclerc, leader in national market shares? No, Lidl, a German distributor which accounts for “only” 6.4% of food distribution in France.

The shopkeeper can boast: “Lidl’s responsible practices hailed by Julien Denormandie”, he rejoices. Sacred contrast with the beginning of the decade of 2010, when we said to ourselves, within the company, “that if we did not change the model, we were going into the wall”, according to Michel Biero, the executive director of purchasing by Lidl France.

2011 is indeed a dark year for what is then a “hard discounter”, established in France since 1989: about fifteen children are victims of serious food poisoning after eating hamburger bought at Lidl. The most seriously affected, Nolan, died in September 2019 at the age of 10 from the after-effects of his poisoning.

The supplier has since been sentenced to prison, and, if Lidl has not been questioned by the courts, he has decided to “get out of this model”.

The brand continues to pose as a “defender of purchasing power”, explains Michel Biero, but “by putting quality”, and by focusing on a reduced assortment: 1,700 referenced products, against sometimes 80,000 references for a hypermarket .

“Lidl is progressing a lot in terms of market share”, recently observed with AFP Frédéric Valette, director of the Distribution department of the market data company Kantar.

Noting that “the French consumer adores the opportunity”, the company multiplies the marketing blows, offering for example “52 food themed weeks” with a special assortment, for example Spanish.

The distributor will be able to rely on its international presence (more than 11,200 stores in 32 countries) to reduce costs, once again: “I only have to call my Spanish counterpart, the prices are negotiated, the contract validated. , all you have to do is order the necessary volumes from France, ”explains Michel Biero.

Lidl, whose financial strike force is not negligible since the Schwarz group, its parent company, is the 4th largest distribution group in the world according to the firm Deloitte, has also invested a lot of money in the renovation of its stores.

Today it has some 1,550 in France, and has just resumed its expansion, targeting in particular the west and the south-east.

Not without coming up against some obstacles, especially legal ones. Capital magazine revealed that the brand had been fined 3.7 million euros for advertisements deemed misleading.

Lidl is also the subject of legal proceedings in several European countries for “patent infringements”. Vorwerk, the maker of the Thermomix, has observed disturbing similarities with one of Lidl’s flagship products, the “Mr. Kitchen” robot cooker. The German brand was convicted of counterfeiting by a Barcelona court at the end of January.

The German brand is also closely watched for its social practices. In February, a Lidl logistics platform in Brittany was raided, as part of an investigation for harassment.

In 2008 and 2009, Lidl was rocked by internal spy scandals in Germany. Installing cameras, hiring private detectives, collecting information on the health of employees: the group has admitted the facts and paid heavy fines.

In France, Lidl now sees a well-known competitor in its rearview mirror: Aldi, another influential German (8th largest group in the world, according to Deloitte) which bought at the end of 2020 545 Leader Price stores from the Casino group. Before this integration, the group had just over 850 stores.

“They are going to densify their network”, notes Laurent Thoumine, executive director of Accenture France and Benelux, while the economic consequences of the health crisis suggest “a form of pauperization of French consumption”. “Fierce competitors”, according to this specialist in the distribution, the two brands will soon have a “significant size” in France.

Aldi is currently following Lidl’s path, targeting a young and connected audience, insisting on “its commitments in favor of fresh, local and responsible products” or recently announcing its commitment “in favor of the dairy industry”.

For now, however, Aldi, credited with 2.4% market share in 2020, has not yet received a visit from the Minister of Agriculture.

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