Swot analysis of Lidl. Lidl Stiftung & Co. KG is a German retail chain international company. Josef Schwarz was the founder of the retail brand, and he laid the foundation of the company in 1973. The headquarter of the company is in Neckarsulm, Germany.
Some of the main products and services of Lidl are;
- Fruits & Vegetables,
- Fresh Meat,
- Bakery Items,
- Cleaning & Household,
- Health & Beauty,
- Flower Market,
- Baby products, and much more.
According to an estimate, the annual revenue of German brand Lidl in 2022 was 100.8 billion Euros, and it has increased by 4.7%. The retail company plans to achieve a net sale of 130 billion Euros by the end of 2026. It would increase by 33 billion Euros.
Some of the top competitors of Lidl are;
- Boots, Walgreens,
- CVS Caremark,
- Lowe’s Companies,
- Costco Wholesale,
- Home Depot,
- Target Corporation,
- Coles Group,
Today, we’ll discuss the swot analysis of Lidl. It’s going to focus on the internal strengths/weaknesses of the German retail chain brand, and the external opportunities/threats that the company has to face. Here’s the swot analysis of Lidl as follows;
Strengths of Lidl
Lidl is an award-winning retail chain brand that affirms the company’s commitment to quality and strengthens its brand name. Some of the awards that the company has received recently are the Most Reputable Supermarket in 2020, the Cheapest Supermarket Award in 2020, and the Fresh Flower Retailer of the year in the Retail Industry Award in 2017.
Lidl offers a great variety of products/services at its stores, and the company sells them under its own label. Own labeling allows the company to achieve cost efficiency in terms of lower supply chain and manufacturing costs. It has increased the company’s profitability. Along with labeling, Lidl launches various promotional offers to the customers; which results in the form of higher sales volume and more profit for the company.
Lidl has earned the reputation of a discounted store, and it allows the customer to do the shopping for less than 30 pounds on the weekends. It’s much more than discounts, the company offers high-quality products to customers at a low price. It shows the company’s commitment to the customers, and the brand sells locally manufactured products. For instance, 70% of the products that the company offers in the UK market come from British suppliers.
Lidl has a very large and speedy growing network in the UK, and the company has got approximately 13 distribution centers and 800 stores in Britain. However, the retail chain brand has a network of more than 11000 stores in Europe and the UK. Roundabout over 315,000 employees are working for the company.
Lidl offers a large variety of products and services to customers, and the company keeps its stores and supermarkets open on Sundays and on the weekends. It’s such customer service that attracts the attention of customers and brings them to the store.
Lidle launched the mobile application “Lidl Plus” in 2018 and “Supermarket Loyalty Card,” and customers could download it from the Google Play Store or Apple Store. It was an excellent step for the company in the digital market, and it increased the company’s sales during the pandemic.
Strong Cash Flow
Lidl has a strong cash flow system and it allows the company to invest in various new products, pays the creditors, and buy new resources.
Weaknesses of Lidl
Lidl has a very large network of stores and supermarkets across Europe. The distribution of employees in its stores is limited compared to the crowd of customers that visit its stores. Often, they need assistance with finding the product and queries to solve about the product. Along with limited employees, the size of the company’s stores is small.
There are many controversies that are jeopardizing the reputation of Lidl. For instance, customers found poisonous xylene in the grave sold by the company in the UK in 2016. There was a scandal that the company was selling horse meat in its supermarkets in 2013. A study by Stern Magazine in 2008 showed that the company spies on its employees. Like the number of times, its employees have gone to the washroom, and other personal details.
Supply Chain Issues
Many product shelves in Lidl like toilet rolls, bread, and vegetable, were empty in 2021 because of the shortage and limited supplies. Many of its suppliers were boycotting the company because the company wasn’t adopting the delivery process relevant to the shortage of drivers. However, their main concern was that the company wasn’t collaborative and cooperative with its suppliers. For instance, the company didn’t accept the distribution wagons that were late; even though the company was aware of the fact of shortage of drivers.
Opportunities available to Lidl
Market Expansion in Europe
Lidl has a network of 11000 stores in approximately 32 countries worldwide, and the retail chain brand is the fastest growing brand in the UK. The rest of the European market has got great growth potential, and the company should open up more stores in Europe and exploit the available opportunity.
The US Market
Currently, Lidl has a network of 300 stores and supermarkets in the US market, and the company plans to open up 600 more retail stores in the US. It’s an excellent step for the company, and the retail supermarket chain brand should take advantage of the world’s leading consumer market.
Threats Lidl has to face
Even though Lidl is growing at a very speedy rate in the UK market and relying on it as its major revenue generator, the British market is highly competitive. Some of the main competitors in the UK market are Morrison, Sainsbury, ASDA, Tesco, and Aldi.
The political environment of Europe is unstable after the Brexit deal, and they’re impacting the customer’s shopping preferences. For instance, the increase in the minimum wage rate would further impact the company.
Conclusion: Lidl Swot Analysis
After an in-depth study of the swot analysis of Lidl; we’ve realized that Lidl is a leading retail chain brand. The company should focus on its strengths to exploit opportunities and work on its weaknesses to avoid threats.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.