Lidl

Lidl Stiftung & Co. KG, better known by its trademark Lidl, is a discount supermarket chain of German origin. It operates more than 12,000 stores in thirty countries and is part of the Schwarz group, one of the largest distribution conglomerates in Europe.

History

The origin of Lidl lies in the family distribution group Schwarz, founded in the 1930s as Schwarz Lebensmittel-Sortimentsgroßhandlung (in Spanish, «Wholesale Distribution of Schwarz Food»). The Schwarzes formed a partnership with the Lidl family, owners of the fruit wholesale groupSüdfrüchte Großhandel Lidl & Co., to open retail establishments throughout Germany under the brand “Lidl & Schwarz.” The business operated until 1944, when they had to close it due to the Second World War.

Josef Schwarz, heir to the founding family, moved to Backnang (Baden-Württemberg) and opened the wholesale business Handelshof in 1968. To sell the products that he did not sell, in 1973 he opened a small discount supermarket in the nearby town of Neckarsulm whose model was very similar to that of Aldi (1948).

When Josef died in 1977, his son Dieter Schwarz planned a national expansion. Instead of using the surname to avoid negative connotations — Schwarzmarkt means “Black Market” — he returned to the idea of “Lidl & Schwarz" and contacted the heir of the Lidl family, Ludwig Lidl, to buy the rights to the brand for 1,000 marks. Within the Schwarz group, Lidl kept the discount stores while the brand was created for the hypermarkets. Kaufland. In 1988 there were more than 450 Lidl stores in West Germany alone, and reunification caused the number to double.

Within the German market, Lidl has 3,300 discount stores and is the second group behind Aldi. Worldwide the figure rises to 10,000 stores.

International expansion began in 1989 with an opening in France. The first store in Spain was opened in Lérida in 1994; since then it has more than 650 supermarkets throughout the country. In addition, it has 11 logistics centers spread throughout Spain, the most relevant by size being the one located in Alcalá de Henares. In 2015, Lidl opened its United States headquarters in Arlington, Virginia.

According to Kantar Worldpanel, Lidl was one of the fastest growing chains in Spain in 2017. In 2015, Lidl managed to achieve sales in Spain worth 3,048 million Euros.

Trade policy

Lidl is a discount supermarket that offers a range of food, drugstore, perfumery and accessories products. Most of the items are white label and many times you can only purchase those references, at a lower price than in a traditional supermarket. There are also limited-duration offers, generally three days, in other segments such as appliances, tools and clothing. The company ensures that 75% of its items are from national suppliers, while the rest come mostly from German distributors.

As happens in other hard discount establishments such as Aldi or Día, spending on decoration and maintenance is reduced. Perishable items are usually sold packaged and without lines of staff for butchers or fishmongers, as happens in a traditional hypermarket. Likewise, employees perform various functions to reduce personnel costs. However, in recent years the policy has been changed to sell more fresh products, expand the size of the stores and thus resemble a conventional supermarket.

There have also been changes in the advertising strategy. When the brand arrived in Spain, the claim used was «Lidl, better price and quality!», but at that time consumers associated the brand with products of inferior quality. For this reason, the parent company has expanded the percentage of national suppliers and has focused on promising product quality, under the slogan «Don't be fooled, quality is not expensive». In 2009, LIdl Spain hired chef Sergi Arola to design and promote the white label Deluxe gourmet products.

Countries

Lidl is present in 30 European countries, as well as in the United States:

Controversy

Lidl has been criticized on different occasions for alleged non-compliance with European directives on labor law. In 2004 the German union Ver.di and the world federation UNI Global Union published the Black Book on the Schwarz Retail Company (in Spanish, "Black Book of the Schwarz Group"), which documents various complaints from former workers at supermarkets owned by Dieter Schwarz, including Lidl. These complaints have also occurred in other countries.

In March 2008, Stern magazine published an extensive report in which it was reported that Lidl Germany systematically spied on its employees to find out details such as the frequency of their breaks, whether they stole products and even their personal and union relations, illegal in the European Union. The parent company, affected by both the Black Book and the espionage, was forced to apologize and promised to change the business model.

Currently, the Spanish delegation assures that approximately 95% of its jobs are permanent and that collective agreements are negotiated with unions. These figures are different depending on each country.

On the other hand, The Guardian revealed in 2014 that the Schwarz group had received 800 million euros from the World Bank, in public aid, to finance its expansion into Eastern Europe.