Will Aldi and Lidl Disrupt the U.S. Grocery Sector?

Foodservice Solutions® Grocerant Guru™ stated that “the pace of change evolving within the grocery sector continues to increase.”  Today Aldi is the fastest growing grocery retailer in the United States and with Lidl entering the U.S. market next year Foodservice Solutions® team expects the competitive landscape to evolve faster than ever. 

So, what’s different?  Why will Aldi continue to grow and how is Lidl different from what we have in the U.S. grocery sector today?  Ronny Gottschlich managing director of the UK arm of Lidl says “Lidl will stick to its tight selection of 1,550-1,650 products because that is the best way to keep prices low” Price and selection will drive the competitive grocery landscape according to our Grocerant Guru™ in 2016 to 2020. 

Lidl is pushing the boundaries focused on the consumers wants and needs and will be a disruptive force according to Foodservice Solutions® Grocerant Guru™ Steven Johnson.  Retailers the ilk of Whole Foods have taken notice on just how successful German discounter Aldi and Trader Joes have become and is now launching its own discount brand Whole Foods 365.    

Aldi it is changing the way consumers shop in Great Britain and is threatening to end the big supermarkets’ stranglehold on Britain’s £175bn-a-year grocery market. In fact Figures out lasts week showed market share gains by both Aldi and Lidl were substantial.  Lidl  sales year over year for the last three months are up 18% on last year. Those numbers are a big wake-up call legacy UK food retailers the ilk of Tesco, Asda, Sainsbury’s and Morrisons, who have all seen sales suffer as customer migration only continues to grow. 

Aldi is growing even faster than Lidl in the UK and expanding the range of products it sells from 900 to more than 2,500 in the past few years.  Remember that the average American consumer buys only 100 items a year from a grocery store.  Yes, they buy them over and over but by sticking to a tight selection of 1,550-1,650 products is how both Aldi and Lidl are garnering customers while keeping pricing low.  

Legacy grocery stores in the United States stock 30,000-40,000 SKU’s, with some stores up to 100,000 SKU’s. Consumers are time starved and don’t like to roam around a huge store looking for the few items they need to compile the family meal.  Is it time to rethink how you approach food retailing? Are you ready for to enter the grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food? 

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991 Contact: Steve@FoodserviceSolutions.us