Lidl is set to overtake its bitter rival Aldi as the top discounter in Europe in the next 10 years, according to a report from IGD.
Last year Lidl increased its sales by 15% to E18.9bn, twice Aldi’s growth rate, and IGD estimates Lidl trebled its European sales between 1996 and 2003, with an annual increase of 17% per annum.
It now operates in 18 countries. Hungary, where it opened last month, is the third new market it entered this year.
Even in their home market of Germany, where Aldi has twice Lidl’s turnover, the gap could be closed, said the report’s author, IGD international programme manager Rachael Aggarwal.
“Aldi is approaching saturation in Germany with 87% of the population within a 15-minute drive. Lidl has a real opportunity. It has opened three new distribution centres this year and has two more planned for next year.”
In Germany, discounters have a 37.4% market share, forecast to grow to 42% by the end of the decade. While this magnitude of market share was not typical of the other 15 countries covered in the report, the discount sector was growing in all but two.
Along with Italy, the UK was not in line with the trend, with Aldi, Lidl and Netto making little impact after entering the market 10 years ago.
Aggarwal said that the newcomers had made mistakes, saddling themselves with a downmarket image, and their multiple rivals had competed aggressively on price.
All three were still adding stores and Aldi and Netto were taking their ranges upmarket, but she added: “They have 10 years of poor consumer perception to overcome.”
John Wood