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SHAPE COVER and there is little space beyond the cash register, so you have to load your purchases right into the cart. When you pay, the cashier already has your change counted out. Aldi and Lidl offer more than just groceries. In the middle of the store are long aisles with baskets of clothes, toys and electronic goods. Every week they publish full-page ads, and Elisabeth Hessler says the stores often have lines outside before they open on the day the new sales fl ier comes out. “The discount chains do incredibly aggressive marketing,” she says. “But you have to watch out. Not everything is as cheap as it seems. Their own brands are inexpensive, but they also sell name brands, and these may be more expensive than in other stores. Customers probably assume that everything is cheap because it’s sold in a discount store.” GERMANY HAS BEEN called a “country of bargain hunters.” But recent years have seen a break in the trend. Last fall, Mercer Marketing Consultants conducted a survey of 2,000 shoppers. The survey revealed that Germans no longer see themselves as bargain hunters but instead place greater value on quality and a wide selection of goods. A full 38 percent, signifi cantly more than in previous studies, said selection and quality are important. “Just relying on low prices will not be enough in the future,” says Sirko Siemssen, an expert on issues in the grocery trade at Mercer Marketing Consultants. “Grocery chains that have a wider selection of goods may experience a resurgence if they consistently make use of their competitive edge. But at the same time, they should keep an eye on prices.” That’s because price still comes fi rst in the survey. Half of those surveyed said that price largely determines how satisfi ed they are when they go shopping. Turan Sevimli can provide evidence that Germans’ intense hunt for bargains has eased. He has run a small local grocery store, Markt Ecke, for six years. ”It’s not just about being inexpensive,” Sevimli says. “Our store is good. I think the reason for this is that more and more 8*SCA SHAPE [4*2007] people want to support their local merchant. I know my customers, I say hello to them with a smile, we have small talk and joke a bit. If an older shopper needs help carrying their purchases home, we can take care of that. In stores that are part of big grocery chains, the cashier doesn’t DISCOUNT CHAINS FOR EXPORT German discount chains have done well abroad, to the point that half of Europe’s largest grocery chains are German. In recent years, Lidl, owned by the Swiss holding company Schwarz, has expanded rapidly throughout Europe, and Aldi, the number two discount giant, is not far behind. . THESE LOW-PRICED chains, called “discounts” in Germany, are grocery stores with a limited number of items. The stores themselves are rather small, and they often At Turan Sevimli’s store, customers can buy locally grown vegetables. even look you in the eye.” Sevimli buys a substantial amount of locally raised vegetables, which customers appreciate. Customers are mainly singles, older people and consumers who demand quality, and these target groups are growing. ▲ sell products under their own brands. According to Frankfurter Marktforscher, discount chains are the only grocery stores that report consistent The discount chains do incredibly agaggressive marketing. But you have to watch out.
growth in sales. Aldi, Germany’s leading discount chain, increased gross sales by 4.2 percent in 2006 from the year before. Each German household spent an average of about 1,200 euros at discount stores in 2006 – 63 euros more than the year before. Schwarz had a highly successful 2006, according to the market survey company Retail Group. It is estimated that Schwarz Group sales rose 12 percent on an annual basis. Discount chains sometimes have their critics, but the fact is that customers seem to like their low prices, quick service and easy access. The discount chains are not generally willing to be interviewed, but in a written statement, Lidl explained its success this way: “The cornerstone of our success is ‘simplicity.’ Our aim is to have all our operations, all our work procedures, run in a simple way, with top quality at the lowest prices possible.” ▲ 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 80, 000 Carrefour France 64, 000 Metro Group Germany 61 ,000 Tesco Britain 45, 000 Rewe Germany 45 ,000 Schwarz Group Germany “I would never buy bread at a discount store,” says Elisabeth Hessler of Aichtal, outside Stuttgart. 39 ,000 Edeka Germany 37 ,000 Auchan France 36, 000 Aldi Germany 32 ,000 Leclerc France 30, 000 6.0 4.7 4.5 3.3 3.3 2.9 2.8 2.7 2.4 2.2 Casino France Market share in Western and Central Europe (percent) Approximate sales in 2006 (million euros) SOURCE: PLANET RETAIL FACTS / LIDL ★ Started in the 1930s as Lidl & Schwarz Lebensmittel-Sortimentsgrosshandlung ★ Lidl is owned by a foundation controlled by the founder Dieter Schwarz and his family ★ Its headquarters are in Neckarsulm, Germany ★ Lidl has some 6,000 stores throughout Europe ★ Kaufl and and Handelshof are also part of the Schwarz Group FACTS / ALDI ★ Started as a family fi rm in 1913 in Essen. Today owned by brothers Karl and Theo Albrecht. Karl Albrecht is the richest person in Germany with a fortune of USD 17 billion. In 2006 he was ranked 13th on Forbes magazine’s list of the richest people in the world ★ Aldi is short for Albrecht Discount ★ In 1961, the chain was divided into Aldi Nord and Aldi Süd after a dispute over the sale of tobacco products ★ There are about 1,600 stores in Germany and some 1,200 stores outside Germany in a number of European countries, the US and Australia [4*2007] SHAPE SCA*9 FOTO: SCANPIX FOTO: SCANPIX ▲
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