The German-based grocery giant Lidl broke into the U.S. market a year ago, enduring its share of both accomplishments and challenges. While most locations opened with high sales volumes, only some stores were able to demonstrate continued success. Due to this inconsistency, Lidl temporarily halted expansion and is likely facing a few questions:
What do U.S. customers think of Lidl? What are they getting right? Where are they falling short? How do they establish themselves in the market, beat competitors, and secure customer loyalty?
Grocery consulting experts Brick Meets Click recently referenced SMG’s industry research to take an in-depth look at Lidl’s U.S. expansion (click here to read the full story). Here is a little of what they covered:
Did Lidl make a good first impression?
Consumers have a lot of choices when it comes to grocery retail, and Lidl knew it had to do something special to draw in a crowd. With a big focus on value and significantly low prices, Lidl was able to attract new customers to its 50 locations in various DMAs across the country. But how did Lidl do after customers walked in the door?
We used our market intelligence tool BrandGeek® to get a specific read on what customers thought of their experience at Lidl. With BrandGeek’s unique combination of behavioral data and customer feedback from visit-detected surveys, we’re able to get a real-time read on consumer perception, shifts in shopping behaviors, and competitive visit share.
Customers went out of their way to get to Lidl. Our results show they traveled an average of 9.3 miles to a Lidl location, compared to an average of 6.2 miles to other supermarkets. They also saw 4X more repeat shoppers than “one-and-done” customers who didn’t return after their initial visit.
Our data goes on to show deeper analysis between these two types of shoppers, including a large gap in satisfaction scores—proving Lidl is doing something right, but perhaps inconsistently across locations.
Where will Lidl go from here?
It takes time and endurance for a concept to make its mark in a new market. But Lidl shows promise and as of now, appears to have staying power. With a revamped store model—rumored to include scaled-down square footage and new product offerings—they could see sales traction and position themselves as a strong U.S. brand.
Click here to read SMG’s case study on Lidl’s U.S. expansion.
Peter Berger | VP, Customer Engagement