Lidl is poised to make a serious play for the online grocery market in Germany, with plans to offer click & collect on fresh and frozen products later this year.
The discounter is investing heavily to boost its German online grocery offering, which to date has been restricted to non-food and ambient grocery lines only, and is set to start trialling the new service in Berlin in December, according to a report in Germany’s Manager Magazin. Other German regions are expected to follow.
Customers will be collecting their fresh grocery orders in store; it is not clear if Lidl also plans to offer home delivery at some point.
Lidl is ramping up investment in online as Germany’s online grocery market is becoming increasingly competitive, with Amazon Fresh expected to launch shortly. In late 2015, the discounter acquired German grocery delivery start-up Kochzauber, and its dedicated online division, Lidl E-Commerce International GmbH, now counts about 1,000 staff, according to Manager Magazin.
The new click & collect service was part of a wider “nine-figure sum” investment in online by parent company Schwartz Group, which also owns the Kaufland chain, the magazine added. Kaufland has been testing an online grocery service in Berlin since early October.
A spokeswoman for Lidl Germany said: ”Lidl are always evolving in the digital domain and have invested accordingly in this area for years. We are continuously testing new formats to expand our online business at all levels. It is correct that we are planning to introduce a new concept in Berlin by the end of this year. Details regarding this will be available during the next weeks.”
Boris Planer, analyst at Planet Retail in Frankfurt, said German grocers were now finally getting serious about e-commerce. ”Edeka, Rewe, Kaufland, Lidl, Globus, Real are now all in it, and that’s after years of passive attitudes, and over 15 years after Tesco started in the UK. The segment is very small still, accounting for around 1% of national grocery sales, but everyone’s now worried about missing the bus should grocery e-commerce really get big. Some retailers – including Metro Group and Rewe – have burnt their fingers in the past by not taking the internet seriously enough early enough.”
Implications for the UK
Lidl’s move into click & collect for fresh will be watched closely for clues as to the discounter’s next move in the UK. Unlike rival Aldi, which offers online shopping on non-food and wine in the UK, Lidl does not offer any online purchasing in this country at the moment.
”This is a test in Germany, but if successful Lidl would be absolutely capable of rolling this out to the UK”
Boris Planer, Planet Retail
For now, the discounter is keeping its cards close to its chest.
“From a UK perspective we continue to monitor any business activity that could be of potential interest to our customers, but do not currently have plans to introduce online shopping,” a Lidl UK spokeswoman said.
Planer said it was too early to tell if Lidl would bring the click & collect model over here, but there was clear potential. ”This is a test in Germany, but if successful Lidl would be absolutely capable of rolling this out to the UK, where Brexit now provides a historic opportunity for Lidl to grab market share in Britain’s stressed middle class, among what will be a tough year of inflation.”