Who will come Aldi to Lithuania: what to expect from buyers and is it worth being afraid of competitors? | Deal

Founded in 1913, the German retailer Aldi celebrated its 100th anniversary in 2013. The Aldi Group consists of two retail chains: Aldi Nord and Aldi SÜD.

“From a small shop in Essen, we have grown into a successful ALDI North Group, represented in nine European countries and with more than 70 regional companies,” says a retail chain with around 60,000 customers in Europe. workers.

In total, Aldi has expanded to 19 countries around the world and owns more than 11,000. stories. The closest stores of this chain are in Poland, where almost 3 thousand. people.

However, Aldi should soon start expanding in Lithuania as well, on Monday, according to sources, vz.lt reported. Although initially Aldi probably had ideas to enter the Lithuanian market by acquiring an existing sales network. Dainius Dundulis, the owner of Norfa 15 minutes Aldi revealed that Aldi representatives who contacted it a few months ago were interested in buying Norfa. D. Dundulis stated that he has not yet considered that possibility.

So what can Lithuanian buyers expect from the new retail network?

What prices prevail?

Aldi is positioned as a leading leader in low raw materials 15 minutes decided to review the prices of various products in the Aldi and Lithuanian retail chains. We will know the prices of Aldi online purchases in Great Britain.

It is true that comparing prices is difficult, because vegetables sold online often come packaged. Aldi also sells products from local farmers in the country.

However, a comparison of the prices of various products revealed that the prices in the retail chains operating in Lithuania and Aldi are quite similar.

For example, at the Aldi retail chain in the UK, you can pay between 50 and 80 euro cents per liter of milk. In Lithuanian supermarkets, a liter of milk costs between 35 cents and a little more than the euro.

The price of potatoes in the UK ranges from 10 to 98 cents. Lithuanian merchants sell potatoes, the price of which ranges from 19 cents to 3.29 euros.

Bread at the UK retail chain Aldi costs between 42 and 91 euro cents, a similar price in Lithuania.

Butter and margarine cost between 80 cents and 2.77 euros. In Lithuanian retail chains you can find butter, which costs 47 cents or 4.79 euros.

Aldi eggs cost from 1.26 to 2.07 euros. In Lithuania, prices also vary from 79 cents to 3.89 euros.

Aldi stores offer coffee from 80 cents to 3.58 euros, and our retailers can offer from 1.45 to 9.99 euros.

Aldi: what is a retail chain?

Arūnas Vizickas, director of the Pricer.lt portal, which sets and compares prices in retail chains, said Aldi is one of the pioneers of low-price retail chains. Lidl appeared much later and followed the Aldi path already named.

Aldi is characterized by the fact that there are almost no famous brand products. On the contrary, well-known products are copied and cheaper versions are sold.

“Even the inscriptions and packaging are close to famous brands. Lidl is doing the same now, 15 minutes said the expert.

A.Vizickas cautions that although Aldi wins the price competition against Lidl, in this area it is basically shoulder to shoulder. Also, notice similarities in both communication and store formats.

“Generally, both retail chains report that they have a low price, but the products are of high quality. And other retail chains are being attacked on an episodic basis. We still don’t see it much in Lithuania, but in Germany and Great Britain this practice is very popular, ”said the interviewee.

R.Vizickas is convinced that Lithuanians should receive a very similar Lidl retail network, which they will not have to get used to again.

“We may see products of different colors and designs. Some of them could be a little tastier. Some may be inferior. But that would be an attack on current retail chains that are concentrating hypermarket With Supermarket in a niche. “Apparently Aldi sees his potential because of them,” he said.

And will it not be the case that Aldi, like Lidl, will adjust to Lithuanian prices? A. Vizickas believes that this is very likely.

“If we compare Lidl’s prices in Lithuania and Germany, Poland or the UK itself, they are higher in our country. “The arrival of Aldi is likely to bring prices closer to those markets where there is more competition,” he said.

Aldi was one of the first chains to offer a variety of products for a limited time, depending on the season. One such attempt was when this retail chain lined up computers alongside groceries.

Aldi can prepare as many items for the season as it could successfully sell, and other stores find it very difficult to sell all of them, even in the long run. If you go to a small store like Aldi now, you can probably buy everything you need for the garden. ” 15 minutes said the expert.

Good news for Lithuania

Sigismund Mauric, Luminor’s chief economist, said Aldi was very similar to Lidl and, in part, to Norfa.

“It is a low-cost retail chain that emphasizes its competitive advantage through a small selection of products and low prices,” said the economist.

According to Maurice, increasing competition between merchants only benefits consumers: prices may fall or product choice may increase. However, it is questioned by several aspects.

“The question is, and it is very big, if there will be enough space for everyone after the good results of last year, because the turnover of the food trade companies has increased considerably. Apparently, this competitive fight could intensify a lot ”, he is convinced.

Maurice also pointed out that market players are adapting to the current situation, as has happened to Lidl.

“Lithuanians like a wider range, they do not regret opening their wallets more widely. Other players adapt accordingly. Looking at the UK market, there the very low price segment has expanded, one third of the area of the store is occupied by semi-finished products, which is not available in any store in Lithuania. It is more difficult to be in Lithuania what is advertised, “he said.

According to J. Maurice, the news about Aldi’s intention to enter the Lithuanian market shows that the company believes in the future of our country.

“We talked about the disappearance of Lithuania 10 years ago. And we ourselves observe how certain players look here. Now we see the opposite situation. These companies believe in the future of Lithuania and in the growth of the market. This partly shows that our environment Regulatory is adequate for the arrival of this type of investment ”, the economist is convinced.

Why are Aldi products cheap?

First of all, as A. Visickas mentioned, Aldi avoids well-known brands. 90 percent. there are cheaper copies of the whole range. And the brands that hit the shelves are usually discounted.

Smaller selection, smaller and smaller stores. According to food news portal Taste of Home, Aldi offers just 900 staples. Because they do not have local brands, there is no need for such large warehouses and outlets. For this reason, renting a premises is less expensive than for other merchants.

Aldi employees take less time to fill and maintain shelves. Other merchants need to make sure everything looks flawless, but many of this merchant’s products are boxed, making aisle maintenance easier for employees.

Also, this retail chain doesn’t try to spend a lot of money on decorations or intricate packaging. You also won’t see a lot of advertising on television or in the press.

It is claimed that there are fewer employees in the room at the same time compared to other merchants. Aldi also works less time than others to save money.

The British experience

Is there really nothing to fear for Lithuanian traders? A text published by The Guardian in 2019 states that after 3 decades, it is clear that everyone was wrong about Aldi’s influence in the market.

When Aldi started its operations in Great Britain, as well as in Lithuania, it was dominated by large retail chains with large stores and a large selection. However, the next baby didn’t even bother to buy ads announcing store openings.

Due to the notable snobbery towards low-priced stores, most Brits thought that Aldi could not gain a foothold in the market. Local retail chains also scorned the new competitor from above. Sainsbury’s noted that there were very few service personnel in Aldi’s showrooms, which was said to be very important to the British. And the Tesco CEO was convinced that his customers were different, so there would be enough room for everyone in the sun.

It is true that the article points out that this was the case for the first 20 years; During this time, this German retailer did not have much influence and market share.

But while Tesco and Sainsbury’s were resting on their laurels and convinced that most people would not set foot in stores like Aldi, the German retailer began to shuffle its cards. According to the research company Kantar Worldpanel, in 2019, two-thirds of family farms visited Aldi or Lidl at least once every 12 weeks. It is currently one of the main networks in this country.

Aldi and Lidl have forced drastic changes. Retail chain Morrison has announced store closures and Sainsbury’s and Asda have planned to merge. Tesco has had to reduce its product range and acquire another small retailer, Booker.

Asleep during the market change

Aldi and Lidl had a growing market share until March of last year. Last year they began to lose the race because they did not adapt to the realities of e-commerce. Online grocery sales in the UK are estimated to have doubled compared to last year, with Tesco growing for the first time since 2016.

Fraser McKevitt, head of sales at research firm Kantar, told The Guardian in early March this year that nearly a quarter of households bought food last month.

It is announced that Lidl did not offer online sales in Great Britain or Lithuania during the pandemic. And Aldi has adapted and started offering the ability to pick up products ordered online. They also offered the opportunity to take them home through partners.

Aldi and Lidl are said to have reduced their UK market share in February for the first time in a decade.