The article pointed out many of those factors that would help Lidl compete effectively against Aldi. The only factors mentioned that might provide a competitive edge against traditional supermarkets and mass merchants are price and the smaller format.

How Lidl will do will largely depend on the markets it enters and the locations it selects. Today most people have several choices and formats where they can do their grocery shopping including the already established Aldi.

First, the biggest advantage that Lidl has is that it is new and it is different. That will attract customers because they will be curious. The company has a lot to offer and will satisfy many customers. However, as with everything, Lidl will find its audience while other customers will prefer to shop elsewhere. That’s the competitor’s opportunity to learn why and to cater to those needs.

I congratulate Lidl for being different, which is just what its competitors need to be. Unfortunately, I fear that some grocery chains will attempt to compete on price alone and, if so, they will fail. Price is important, but when prices are the same, or even close, quality and service can matter a whole lot more.

In any new venture (product, market, country, etc.) one needs to consider the success or failure of the offering in existing markets. Lidl and Aldi have decimated the key UK competitors and the UK market is probably closer to the US market in many ways. I would not bet against Lidl nor take them lightly. Aldi demonstrated its “silent killer” characteristics and has taken share from traditional supermarkets. If Lidl is indeed, “Aldi on steroids” with many of the positive characteristics noted in the article, not to mention more top 100 branded US products it will carry, then I predict a very positive launch in the US.

Traditional retailers continue to be squeezed by the extreme value retailers as well as the online players. Space to maneuver and respond is shrinking. Never a more pressing time to identify and implement a differential advantage strategy, keeping in mind that price and convenience may no longer be available as positive points of difference.

Lidl will do well in under served areas and low income regions, which is where Aldi shines, so expect another price war. Walmart will be ready, and the consumer will win in the short run. Who will lose? The older poorly managed independent stores, and perhaps older Save a Lot stores, and the rest will not feel much loss, as they serve a different mindset of customers. Last week we discussed the over crowded retail market, and yet we see another large supermarket chain opening up. Time will tell, but unfortunately the losers will the be local store owner, unless they are strong in perishables,service, and of course great values.

I’m surprised by many of the comments of my fellow BrainTrust members on this one. I don’t see as much risk for Lidl as others do here. I also see more potential than just under-served and and low income markets. In my area, Aldi has opened (and continues to open) stores in more traditional suburban areas where they are competing with Giant Food (Ahold), Safeway, Walmart, Target, Wegmans, and various independent organic grocers. While highly competitive, I just read through a Facebook exchange in my community where people could not stop cheering that we are getting an Aldi in a spot formerly held by an Office Depot. Someone mentioned Lidl and the conversation turned into an “I wish they were coming!” “New” is certainly a powerful motivator in the grocery market near me! I suspect Lidl has done quite a bit of research to understand the best locations to open their stores and I believe that will be the key to their success. At least initially, I suspect they may be a destination grocery run… Read more »