A new study found just about a year after Lidl’s entry into the U.S. market, nearly half of shoppers are going there more than twice per month. A particular draw? Fresh produce.
Sixty-three percent of Lidl shoppers in a study “US Shoppers’ Appetite for Discounters” conducted by research firm Oliver Wyman said they’re “highly satisfied” with Lidl’s fresh produce, despite the hard discounter’s limited assortment format.
“We’re not surprised,” said study co-author George Faigen, partner in retail and consumer goods practice for Oliver Wyman. “We find great fresh offerings in a limited assortment, in an outlet such as a hard discount. Lidl’s offering seems to be well curated. Whiel they do not carry 17 different types of tomatoes, they’re getting good reaction on the assortment they do carry.”
Carrying a limited assortment allows Lidl to move high volume with less labor and overhead.
“If they get it right, which (Lidl) seems to be doing so far, the limited fresh offering can have great appeal,” Faigen said.
The study focused on a core group of 600 regular shoppers in a pool of 3,600 individuals in the six states Arlington, Va.-based Lidl U.S. operates. Authors analyzed consumer perceptions prior to Lidl’s opening, a few months after it opened, and again in April 2018, a few months prior to the company’s 1-year anniversary.
Authors had several other key findings:
- Lidl is “stealing” customers from a broad range of nearby competitors;
- A higher percentage of Lidl customers (46%) said their primary reason to shop there is quality, good promotions and fresh products versus those who cited low prices (39%);
- Study authors said they were surprised to find Lidl had a higher perception of freshness than competitors;
- Satisfaction is higher in new markets than established, which authors said is due to Lidl tuning its format and offerings to meet expectations;
- Difficulty in reaching stores is the #1 reason for not shopping more often at Lidl;
- Consumers who have never shopped at Lidl are more aware of the grocer than a year ago.
While Lidl’s “rocky” entry in the U.S. has been thoroughly scrutinized in the media, with initial expansion plans delayed and a recent change in U.S. leadership, study authors say the German discounter is on a healthy path to expansion.
The retailer has made significant changes in location, ad strategy and product assortment to better market to the U.S. consumer, Faigen said, and it’s paying off.
“They’re an agile company that continually finds a way to match themselves to the local market,” he said.