The Truth About Lidl, The Grocery Chain Invading The U.S.


The champion of US discount supermarkets,
Aldi, may be getting some serious competition, and it’s coming straight from their home country. In 2017, German grocery chain Lidl announced
they were taking a run at the American grocery market with a major expansion. So, who are they? At the time Lidl tried to break into the US
market, they already had more than 10,000 stores across 28 countries.That’s plenty of
time to figure out what works and what doesn’t but strangely, if you stop into any of Lidl’s
original 53 American stores, they’re almost nothing like their European counterparts. In Europe, Lidl stores are incredibly streamlined. Their products are about 90 percent their
own private label, and they have an average footprint of only about 10,000 square feet. They only stock between 1,000 and 1,500 products,
keeping their overhead low while still carrying all the basics customers need. Lidl USA stores were built to be about twice
the size, and they carry an average of about four times as many products. That means they’re not just bigger, but they’re
more expensive for Lidl to operate and saddles the company with a higher overhead. That may at least partially explain why they’ve
opened fewer stores than they planned. When Lidl first opened in the US, they were
in the country for about two weeks before they were handed their first lawsuit by rival
grocery store Kroger. Welcome to America! The lawsuit focused on a perceived trademark
infringement which Kroger claimed would lead to brand confusion. Lidl’s house brand, Preferred Selection, was
too close to Kroger’s brand, Private Selection, they said. Kroger also claimed that the confusion would
give Lidl an unfair advantage as customers would think the two were related. Lidl was having none of it, stating, “Kroger is using this lawsuit to try to: disrupt
the on-going launch of a new, emerging competitor that offers consumers high-quality products
at far lower prices…by painting Lidl as a copycat, when in fact Lidl is a decidedly
different and (better) grocery experience.” Only a few months after the lawsuit was filed,
Supermarket News reported that the case had been dismissed with prejudice. Lidl has a reputation for being rough on their
employees. Just how rough? There was an entire book written on Lidl’s
offenses. It’s called The Black Book on Lidl in Europe,
a compilation of stories told by Lidl employees and collected over the course of two years. According to numbers from The Independent,
Lidl employed around 151,000 people when the book hit in 2004, and more than 200 stores
were implicated. There was some seriously dark stuff in there,
and a number of workers spoke about what one shop workers’ trade union called, quote, a
“climate of fear”. According to the accusations that the book
collected, Lidl workers were required to start working before their shift started, amounting
to countless hours of unpaid work. Workers who didn’t meet outrageous standards
were often accused of theft and forced out of the company, and management was tasked
with searching employees and their personal property to make sure they weren’t stealing. Bathroom breaks were reported to be a luxury
not always given, and one former cashier even said since she wasn’t allowed to leave the
register, with disastrous, and humiliating, results. Later, when purchasing agent Robin Goudsblom
spoke to the media, he admitted they’d made some mistakes, saying “We are not a perfect company. We also have a lot of room for improvement,
especially [in] the way we treat employees.” “Good luck with your layoffs, alright, I hope
your firings go really well.” “Kay.” “Thanks a lot.” According to The Guardian, the first choice
for naming the chain just couldn’t happen. That’s because it translates in English to
“The Black Market,” a term most commonly associated with business that is less-than-legal. It was decided store co-owner and retired
schoolteacher Ludwig Lidl would be paid for the rights to use his name for the store. You might think he struck it big and could
retire secure in the knowledge his name was plastered all over a multi-billion-dollar
company, but you’d be wrong. According to Bloomberg, Lidl was given 1,000
deutschmarks for the use of his name. When the stores opened in the 1970s, that
was around $500. Also according to Bloomberg, Lidl boss Dieter
Schwarz was worth $22.7 billion in 2018…give or take. Lidl’s head, Dieter Schwarz, isn’t just super-private,
he’s so private The Guardian says there are stories suggesting he once turned down an
entrepreneurial award because he didn’t want to have his picture taken. It’s unclear whether or not that’s true, but
we do know there are only two confirmed photographs of him in existence, and one’s in black and
white. That’s pretty impressive in today’s technological
era, and not surprisingly, there are plenty of rumors surrounding the man. In 2010, one German media outlet tried to
get a closer look at his life, and found that he was so unrecognizable even in his hometown
of Heilbronn that he could walk through the streets without anyone knowing who he was. In their attempt to put Schwarz under a microscope,
they found hints at secret addresses for his office, pastors who stayed mum about rumors
that he occasionally preaches from the pulpit, and whispers of charitable projects funded
by a mysterious benefactor who insists he goes unnamed. They were stonewalled at every turn, and said
the entire city seemed curiously quiet when it came to the billionaire businessman. Lidl isn’t just about selling all your grocery
basics at a low price, they’re also about saving the world. Sort of. When it comes to what they define as “quality,”
they’re not just talking about taste and price: they’re also looking at sustainability. Take seafood, for example. They’ve made a promise that all the seafood
you’ll find on their shelves is either responsibly farmed or certified sustainable, and they
partner with the Marine Stewardship Council, the Aquaculture Stewardship Council, and the
Global Aquaculture Alliance to make certain of it. There’s a whole slew of certification labels
you’ll see on their products, including the ever-popular USDA Organic labels and the Non-GMO
Project label. Then, there are also products that are produced
in partnership with the Rainforest Alliance, the Roundtable on Sustainable Palm Oil, and
Fairtrade International. Those little labels mean a lot! Then, there are individual products. Their honey has been certified by True Source
Honey and is completely traceable, and their olive oil is independently tested and confirmed
as the real stuff before it hits the shelves. Plastic is a huge problem, and there’s tons
and tons and tons of it filling the planet’s oceans. According to Greenpeace, a huge amount of
the plastic we throw away in our everyday lives comes from grocery stores, and that’s
why senior oceans campaigner Louise Edge praised Lidl’s announcement that they were going to
be getting rid of single-use plastics in their UK stores. To be more specific, the plastic they’re getting
rid of is the black stuff, especially trays. That tends not to be recyclable, as sorting
machines can’t see it. In September 2018, Lidl said they were starting
with the plastic that comes with fruit and vegetables, then will be moving on to meat,
poultry, and seafood. They added that it would make a huge difference,
and say they expect to see a reduction of waste by about 100,000 pounds each year once
the transition is complete. They say that’s just the beginning of plans,
and customers can expect to see more changes down the road, like making 100 percent of
the packaging on their private label brands either widely recyclable, able to be reused,
or designed to be refilled. “While you’re out there destroying the earth,
I’ll be saving it, and history will remember me.” Lidl carries a ton of their own, private label
products, and that allows them to sell things incredibly cheap. While customers might love the low prices,
there’s a dark side to all those cheap foods. In 2015, farmers in Northern Ireland blockaded
a Lidl distribution center in protest over the price of milk. Essentially, Lidl was selling milk as a loss
leader, which meant it was a product so cheap they wouldn’t make money on it, but it would
get customers in the door and spending money on other products. Since they and their competitors were selling
milk at a third of the cost it took dairy farmers to produce it, farmers were calling
foul and saying the discounter was essentially forcing them out of business. It’s not just milk, either. In 2016, farmers were protesting in Dublin
over the cheap prices Lidl and Aldi were using to sell their produce. Those cheap prices were such a big deal they
were changing the market norm, and was making it impossible for farmers to produce fruit
and veggies while making ends meet. Those cheap vegetables? It turns out that someone has to pay the price. If you like supporting charities with your
purchases, there are a few partnerships Lidl has already made in the US to continue a tradition
they’ve already established in their European stores. In 2018, Lidl learned that 15-year-old Virginia
resident Eric McKay was a huge fan of their peanut butter. After he tweeted them, they told him they
would hook him up with a lifetime supply if he got 72,000 retweets. He did, and they did…but the story doesn’t
end there. Not long after he got his first pallet of
peanut butter, the government shutdown happened. McKay’s father was a federal worker, and the
family knew many impacted by the shutdown. When Lidl found out that he was going to help
families by giving away some of his peanut butter, they reached out to him again. The result? In April 2019, they kicked off an autism awareness
campaign that featured special jars of peanut butter with McKay’s picture on them. They’ve also done different partnerships in
different countries. In Germany, for example, they launched a mineral
water and dedicated a portion of the sales to the German branch of SOS Children’s Village,
while in Ireland, they announced a three-year partnership and massive pledge to the youth
mental health charity Jigsaw. Lidl made their fortune in the grocery business
by advertising limited-time, weekly deals on other products they scored big on. They’ve branched out, though, and in 2017
they announced they were going to be partnering with Heidi Klum for their own affordable but
fashionable clothing line. Klum’s Lidl line is her first complete fashion
line, and Klum has said it’s the combination of Lidl’s international reach and reputation
for affordability that means it’s a perfect market for her. Is having a clothing line in a discount grocery
store a little unconventional? Yes, but she’s psyched to have her clothes
on sale at a store that’s mostly known as a supermarket. She’s said: “I’m proud to have a range in the supermarket;
I wanted to put it in everyone’s faces that we are in a supermarket.” They’ve even staged full-fledged fashion shows
that celebrate their grocery store connection, and it just goes to show that you can be fashionable
and budget-savvy at the same time. So, when you have the option to choose between
Aldi and Lidl, what are the practical differences you’re going to see when you walk into the
stores? They may both be all about the bargains, but
there are some major differences. While European Lidl stores have the same coin-operated
shopping carts Aldi does, they aren’t doing that at their American locations. Also, Lidl stocks some name-brand types of
alcohol, while Aldi is strictly private label in that department. Prices were comparable at both stores, and
the stores even have similar looks. While Lidl has struggled to make a break into
the US, Aldi has had some serious success. But when it comes to customer loyalty, Lidl
might just take the cake. Marketing surveys have shown that customers
actually rate Lidl more favorably than they rate Aldi, and that’s a huge deal. Lidl scores higher in things like price, freshness,
and quality, and surveys have also found that about half of Aldi regulars also shop at Lidl. Lidl is also a bigger hit among shoppers in
the 18 to 24 age bracket, so is it possible that Aldi has some competition sneaking up
behind them? Check out one of our newest videos right here! Plus, even more Mashed videos about your favorite
stores are coming soon. Subscribe to our YouTube channel and hit the
bell so you don’t miss a single one.

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