This is a detailed SWOT analysis of Lidl. It examines the strengths and the weaknesses of Lidl. It also examines the opportunities and the threats facing the company. Lidl is a German discount supermarket, headquartered in Neckarsulm, Germany.
SWOT analysis of Lidl
Strengths of Lidl
Lidl is a German grocer. It was founded in 1973. It is now one of the leading food retailers in Europe. Lidl has been in business in the UK since 1994. As of October 2019, it is the 7th largest supermarket chain in the UK with 6.0% market share (Kantar, 2019). Its market share in Spain is 5.6%. It is also one of the strongest brands in its home market, Germany.
Lidl is one of the fastest growing supermarket chains in the UK. It now has 760 stores and 13 distribution centers across the UK and employs about 22,000 people (Lidl, 2019). It also has over 10,000 stores across Europe and decided to open its first store in the USA on 15th of June 2017.
Lidl is a well-known discounter. However, it is more than a discounter. It is committed to providing customers with the highest quality products at the lowest possible prices. Lidl also focuses on selling locally produced products. For example, 70% of the company’s products offered in the UK come from British suppliers (Lidl, 2019).
Weaknesses of Lidl
Compared to some other supermarket chains, Lidl has a relatively small number of employees in each store to help customers in product search and address their queries. This is a problem for some customers, as they sometimes need assistance in product-search.
Lidl’s reputation was at risk due to some controversies over the years. For instance, the company was accused of spying on its employees across Germany in 2008. Spying included but not limited to recording the number of times employees went to the toilet, and their very personal details (Conolly 2008). The accusation came from a German news magazine Stern which conducted an investigation in Lidl stores across Germany. Lidl was also one of the supermarket chains caught up in horse meat scandal in the UK in 2013. Poisonous xylene was also found in 2016 in a grave sold by Lidl UK. These controversies have very negatively impacted on the brand reputation.
Opportunities for Lidl
Lidl currently has over 10,000 stores across Europe. Therefore, growing further in Europe has good potentials and it is feasible as well. In fact, Lidl is one of the fastest growing supermarket chains in the UK. Its growth potential in the UK is simply great, particularly in the capital, London. In June 2019, it unveiled £500 million London expansion plan for 40 new stores (Keown, 2019).
Lidl has great opportunities to grow in the USA. Indeed, it has a plan to open as many as 600 stores in the country. However, Lidl should make cautious steps in the US as some other retailers e.g. Tesco failed in the country.
Threats to Lidl
Threat is the last issue to address in the SWOT analysis of Lidl. There are a number of competitors challenging Lidl in the UK and other European countries. One of the biggest challengers is Aldi as it is also a discounter. Other competitors in the UK are Tesco, Sainsbury’s, and Morrisons to name but a few.
Changes in consumer behaviour, and any political instability in Europe may impact on Lidl significantly. It may sound harsh; however, any increase in minimum wages may also impact on the company’s profits.
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Last update: 03 November 2019
Kantar (2019) Great Britain grocery market share, available at: https://www.kantarworldpanel.com/en/grocery-market-share/great-britain (accessed 22 October 2019)
Keown, C. (2019) Lidl unveils £500m London expansion plan for 40 new stores, available at: https://www.cityam.com/lidl-unveils-500m-london-expansion-plan-for-40-new-stores/ (accessed 03 November 2019)
Lidl (2019) About Us, available at: https://www.lidl.co.uk/about-us (accessed 03 October 2019)
Photo credit: www.pixabay.com
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.