1. Best In France Case study : LIDL
Guillaume ADIN
Harold GUERIF
Antoine GUILLIER DE CHALVRON
Maxime ROSENWALD
Best In France Case study : LIDL

2. LIDL and the hard discount market
6800 stores in Europe 3100 stores in Germany 1319 stores in France
Average size: 687 m²
Rank 7 in food retailers

3. Background Lidl & Schwarz : 1970 in Souabe (Germany)
Two mains activities were developed:
Food discounters : Lidl
Retailers : Kaufland and Handelshof were grouped into self-service markets and superstores.
Establishement of Lidl in France in 1988 with the opening of the first store in Colmar (Haut-Rhin). In 1989, Lidl opened in the east of France, whereas his major competitor, Aldi, arrived in the north.

4. 1400 stores all over the country Between 50 and 100 openings a year
Strengths
1400 stores all over the country
Between 50 and 100 openings a year
50% of French consumers go to a LIDL shop
Located in 24 countries : used to deal with different cultures
Good knowledge of european suppliers
Power of negotiation with classical big brands
Since 1973 in Germany : efficient logistic system
Weaknesses
External communication : reduced to the minimum
The LIDL stores are sinister
Any improvement of the products’ visual : everything stay in transportation’s boxes
The working conditions are one the worst of the distribution’s sector
Threats
Classic supermarkets deal more and more cheap products but keep their good reputation
Sometimes classic dealers create their own hard-discount brand (Carrefour)
The security of the stores is not at the top : 6 hold-ups during the month of august 2008
Opportunities
People want products which are always, but with the same level of quality
Bio and fair-trade products, are still expensive and could be new markets for the hard discount
LIDL understood how to use the « loi Raffarin » to optimize their implantation all over the country

5. What problems did LIDL encounter ?

6. The growth strategy : to go faster than ALDI
Quick coverage of the French territory
Huge investments to build warehouses
Agreements of recovery (Dia, Europrix...)
The outlet profile have to fit to the LIDL’s standard
Saving on market researches
Opportunistic acquisition
Several regions at a time

7. The growth strategy : to go faster than ALDI
« Loi Raffarin »
1 000m²  300m² : administrative authorization of establishment needed
Defend “small business” against major distributors
Limit the expansion of hard-discounters
LIDL’s stores : 300m² + expansion requests
Easier than build requests
Requests
Applied
Permitted
Permitted Rated
2007
Evol
Building 68
-32% 34
-26%
50%
Extension
+26% 45
+22%
66%

8. How to fit to the french market ?
German Hard Discount
Little sized shops (less than 600m²)
Single reference by type of product
Lowest prices
Fair Trade
Minimalist presentation of products
Weekly prices’ reductions on non-food products
Reduced staff
Only own-label or unbranded
Some of national and historical big brands
More fresh vegetables and fruits, more types of fresh meal…
French Hard Discount
Fair Trade

9. Relationship between employees and management
Difficult working conditions
Spying of employees
Bad intern communication
Poor picture of the company for the consumers

10. Thank you for your attention