Indledning
The European grocery chain Lidl has arrived in the US and bargain hunters should be excited.
A recent price check on a basket of 20 items by Jefferies analysts foundthat Lidl was about 9% cheaper than Walmart, the largest grocer in the US. Lidl claims to offer products for as much as 50% less than rival stores.
So far, Lidl has opened 10 stores along the East Coast and plans to open 80 by the middle of next year.
Lidl has already upended the grocery-store market in the UK, sending some of the largest supermarket chains into vicious price wars. Analysts are now expecting it to do the same in the US.
Indholdsfortegnelse
1. Most of its products are private-label brands
2. It has a limited selection of products
3. It stocks "fast-moving items"
4. Its stores are relatively small
5. It keeps labor costs low
6. It displays products in the boxes they were shipped in
7. It cuts costs on things like lighting
8. It doesn't spend a ton on ads
Assignment :
1) There are eight reasons for Lidl’s low prices. Explain each reason in your own words.
2) Who is Lidl’s largest competitor in the US? Find out more about this competitor, including:
3) Take a guess. Why do you think the largest supermarket chain is not represented in Denmark?
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Uddrag
Business Insider/Hayley Peterson
"There is a lot of volume through a limited number of items," retail analyst Scott Mushkin of Wolfe Research told Business Insider.
For instance, according to Mushkin, the store might only stock two types of mustard: its own brand and a national brand.
This limited variety gives Lidl more buying power with its suppliers as it is ordering larger quantities of fewer products.
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Business Insider/Hayley Peterson
Lidl favors everyday items that shoppers buy often, Mike Puglia, director of retail insights firm Kantar Retail, told Business Insider.
"The assortment is limited to the fastest moving items, which drives gross profit dollars," he said. "Higher velocity items mean less money tied up in inventory."
In a visit to one of the new stores, Puglia noticed that the focus was on everyday items such as cereal, juice, and produce, rather than niche or specific products.
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