Aldi and Lidl: From Germany to the Rest

of the World

Stefan Schmid, Tobias Dauth, Thomas Kotulla, and Fabienne Orban

Abstract
Within the retail industry, the grocery discount segment has grown in importance
during the last decades. Aldi and Lidl are the two leading grocery discounters
worldwide. The present case study outlines the internationalization of Aldi and
Lidl. Not only market entry strategies but also target market and timing strategies
as well as the standardization-differentiation controversy are addressed.

1 Aldi and Lidl Within the Grocery Discount Industry

With a worldwide annual sales volume of € 994.9 billion in 2014 for the top
10 grocery retailers and an average annual sales growth rate of approximately 3%
between 2010 and 2014,1 the grocery retailing industry can be considered one of the

1
See Anonymous (2015a).
S. Schmid (*)
ESCP Europe Berlin, Berlin, Germany
e-mail: sschmid@escpeurope.eu
T. Dauth
HHL Leipzig Graduate School of Management, Fraunhofer Center for International Management
and Knowledge Economy, Leipzig, Germany
e-mail: tobias.dauth@hhl.de
T. Kotulla
ESCP Europe Berlin, Berlin, Germany
University of Applied Sciences Europe, Berlin, Germany
e-mail: tkotulla@escpeurope.eu
F. Orban
HHL Leipzig Graduate School of Management, Leipzig, Germany
e-mail: fabienne.orban@hhl.de

# Springer International Publishing AG, part of Springer Nature 2018 81

S. Schmid (ed.), Internationalization of Business, MIR Series in International Business,
https://doi.org/10.1007/978-3-319-74089-8_4
82 S. Schmid et al.

Worldwide top 10 grocery retailers 2014 European top 10 grocery retailers 2014
Worldwide European
Home Home
Company sales volume Company sales volume
country country
in € bn in € bn
1 Wal-Mart US 363.4 1 Schwarz3 Germany 72.9
2 Costco US 83.0 2 Carrefour France 54.4
3 Kroger1 US 81.7 3 Tesco UK 52.2
4 Schwarz2 Germany 79.3 4 Aldi Germany 48.3
5 Tesco UK 76.5 5 Edeka Germany 45.9
6 Carrefour France 74.7 6 Rewe Germany 40.2
7 Aldi Germany 65.1 7 Auchan France 34.5
8 Metro Germany 63.0 8 Leclerc France 30.2
9 Target US 54.7 9 ITM France 28.8
10 Auchan France 53.5 10 Metro Germany 26.8
1
Kroger includes Harris Teeter, which was taken over by Kroger in 2014.
2
Approximately 79.1% of Schwarz’s sales can be assigned to Lidl (€ 62.7 bn). On a worldwide
level, Lidl would be ranked 9th.
3
Approximately 86.0% of Schwarz’s sales can be assigned to Lidl (€ 62.7 bn). On a European
level, Lidl would be ranked 1st.
The data only cover sales in the food and near-food segment; food services are excluded.

Figure 1 Leading grocery retailers in the world and in Europe. Source: Based on Lebensmittel
Zeitung (2015a, b)

world’s key economic sectors. Over the last decades, grocery discounters such as Aldi
and Lidl have strengthened their position in the grocery retailing industry—especially
in Germany and Europe.2 With their no-frills approach, they have led to significant
changes in the industry and have challenged many companies which operate other
store formats, such as supermarkets or hypermarkets. In this context, a Financial
Times report on international retailing noted, already in 1995: “The spread of the
discount format has been particularly disruptive to Europe’s grocery retail industry
and has driven retailers to examine cross-border markets.”3 Figure 1 illustrates the
leading grocery retailing companies in the world and on a European level. During the
last decades, Aldi and Lidl have climbed in the rankings; in 2014, Aldi reached 4th
and Lidl even ranked 1st in Europe (in terms of sales volume).4

1.1 Characteristics of the Grocery Discount Format

The key terms that describe a grocery discounter are minimalism and efficiency,
which are integrated into all business areas.5 Indeed, the ambition of grocery
discounters is to sell quality products at the lowest price possible. To realize profits
in spite of the low prices, grocery discounters reduce their costs to a minimum and

2
See Anonymous (2014a).
3
White (1995).
4
See Lebensmittel Zeitung (2015a).
5
See Warschun and Schmidt (2011, p. 4).
Aldi and Lidl: From Germany to the Rest of the World 83

attempt to generate high volumes of sales through a limited product range of fast-
moving items. The approach of cost reduction especially affects the spending on
store design, customer service and advertising: grocery discounters try to save
money by building up their stores in suburban areas and remote districts, where
the rental fees or purchase prices for properties and buildings are low.6 Furthermore,
all companies have a basic outlet format that is similar to that of a warehouse, with
merchandise sold directly from cardboard boxes. In the stores, customers only have
limited possibilities to contact service personnel in case of product-related questions
because there is no dedicated customer service department.7 Additionally, with
regard to advertising, at least in the past, grocery discounters did not launch costly
TV ads or image campaigns—oftentimes, they only used flyers and newspaper ads
as promotion material.
Experts distinguish between so-called hard discounters and soft discounters:
today, the product range of a hard discounter covers some 1500 items—and almost
all of these are store brands. The product range of a soft discounter, however, covers
a range of 4000 goods and includes store brands as well as branded products.8

1.2 Development of the Grocery Discount in Germany

In the early 1960s, Karl and Theo Albrecht opened the first Aldi (Aldi ¼ Albrecht
Discount) grocery discount stores in Germany. At that time, many industry experts
questioned the potential success of the hard discounter’s business model. However,
within a few years, the two brothers built up several hundred stores in Germany and
started their international expansion in Europe. Their new store format, which was
highly competitive and successful, proved many experts wrong. Based on the
national and international success of Aldi, the German grocery discount industry
became an important segment within the worldwide grocery retailing industry. By
2014, Germany was the home base of four major grocery discounters (Aldi, Lidl,
Netto and Penny) with an annual sales volume of more than € 68.6 billion in
Germany9 and more than € 155.2 billion globally.10
However, for some time now, the success stories of the four major grocery
discounters originating from Germany have been jeopardised: although the companies
were able to expand their market share in Germany to approximately 40%,11 they now
increasingly face signs of market saturation and stagnating growth in their home
market.12 Today, the market share of grocery discounters in Germany is at a level of

6
See Colla (2003, pp. 58–59).
7
See Roth (2016, p. 36).
8
See Institute of Grocery Distribution (2011).
9
See Lebensmittel Zeitung (2015c).
10
See Borger (2015, p. 9).
11
See Anonymous (2015b).
12
See Nielsen (2002, 2008) and Planet Retail (2008).
84 S. Schmid et al.

approximately 38.5%, and experts assume that this market share will remain
unchanged in the coming years.13 Figure 2 provides a detailed illustration of the
sales volume distribution in the German retailing industry.
As a result, German grocery discounters have had to adjust their strategies to fuel
further growth. In this context, they have faced two key options for developing
further.14 They could:

• try to identify and target new customer segments within their home market (i.e.,
Germany), and/or,
• continue their growth through expansion in foreign markets.15

The two leading grocery discounters in Germany—Aldi and Lidl—started their

international expansion well in advance of any other competitor.16 Today, both Aldi
and Lidl generate more than 50% of their revenues in foreign markets. Furthermore,
the two belong to the top ten companies of the pan-European and worldwide food
retailing industry and are regarded as the world’s largest food discounters by sales
volume (see also Figure 1).

Others
8.1%

Supermarkets
11.2%

Hypermarkets
42.2%

Discounters
38.5%

Hypermarkets: large product range at high, medium & low prices; size: min. 1,000 m² up to 2,500 m²
Discounters: limited product range at low prices; size: about 1,000 m²
Supermarkets: medium product range at high, medium & low prices; size: min. 100 m² up to 999 m²
Others: limited product range at high, medium & low prices; size: less than 400 m²

Figure 2 Sales volume distribution in Germany’s grocery retailing industry by store format (as of
2014, total sales volume € 170.9 billion). Source: Based on Anonymous (2015b), Nielsen (2015,
p. 16) and Schmid et al. (2013, p. 536)

13
See Lingenfelder (1995, p. 298) and Twardawa (2006, pp. 381–383).
14
See Anonymous (2003) and Peitsmeier and Heeg (2004, p. 35).
15
See Dawson (2000, pp. 123–127) and Liebmann and Zentes (2001, p. 259).
16
See Olbrich and Peisert (2004, p. 52).
Aldi and Lidl: From Germany to the Rest of the World 85

1.3 Aldi’s History

Aldi was founded by the two Albrecht brothers in 1946, when Karl and Theo took
over the grocery business from their parents.17 At that time, they faced a severe
shortage of goods and groceries in post-war Germany. As a result, the two brothers
were forced to narrow the product range in their stores.18 Even in the 1950s, when the
German economy prospered again, they did not modify their product offerings. In the
early 1960s, the Albrecht brothers realized that their limited product range was by no
means a disadvantage for them. Karl and Theo recognized that their stores were
highly profitable, and they saw no need to implement the characteristic store concept
of a supermarket, where shoppers could choose from a wide range of goods.19 Dieter
Brandes, a former Aldi manager, states that the two brothers initially planned to
convert their grocery stores into typical supermarkets before they incidentally
observed that their minimalistic business model was highly successful.20 Brandes
describes the hands-on mentality at Aldi by claiming that the company did not set
any financial targets: “Some have called budgets toys for chief executive officers.
They replace chance with error. Everyone does it. So it has to be right, doesn’t it?
ALDI gets along without it.”21
In 1961, the two brothers divided their company into two separate organisations.
According to their agreement, Theo Albrecht was responsible for the northern part of
Germany and founded the Aldi Nord GmbH & Co. OHG based in Essen, Germany.
Karl Albrecht took charge for the southern part of Germany and established the Aldi
Süd GmbH & Co. OHG based in Mülheim, Germany.22 Today, both companies
operate independently, except on strategic decisions such as price promotions and
purchasing conditions, where they consult each other.23
During all market entries in foreign countries, the company followed the initial
territorial agreement from 1961. Thus, Theo Albrecht focused his expansion on the
north-eastern, western and south-western countries in Europe. Karl Albrecht
addressed the southern and south-eastern regions. Additionally, Karl was responsi-
ble for the market entries in Anglophone countries such as Australia, Ireland, the
U.K. and the U.S.24

17
See Lebensmittel Zeitung (2008).
18
See Brandes and Brandes (2015, p. 16).
19
See Brandes and Brandes (2015, p. 11 and p. 16).
20
See Brandes and Brandes (2015, p. 14).
21
See Brandes and Brandes (2015, p. 96).
22
See Lebensmittel Zeitung (2008).
23
See Brandes (2001, p. 28) and Lebensmittel Zeitung (2007, p. 33). In this case study, there will be
no further distinction between Aldi Nord and Aldi Süd. Both entities are considered as one
company.
24
See Planet Retail (2008).
86 S. Schmid et al.

In 2014, Aldi operated more than 10,000 stores in 17 countries and generated
sales revenues of approximately € 65.1 billion worldwide.25 Further statistics show
that approximately 42% of the worldwide sales could be assigned to Germany,
nearly 32% were generated in other European markets, and approximately 26%
were achieved outside Europe.26

1.4 Lidl’s History

In 1973, 12 years after the Albrecht brothers opened their first Aldi stores, Dieter
Schwarz established the grocery discount retailer Lidl in Ludwigshafen, Germany.27
Similar to Karl and Theo Albrecht, Schwarz had worked in a small family-owned
retail business before he launched his own discount retailer business. Today, the Lidl
Stiftung GmbH & Co. KG is a part of the “Unternehmensgruppe Schwarz”, a group
that owns the Lidl and Kaufland companies.28
At first glance, it seems that Dieter Schwarz has successfully copied Aldi’s
business model for his own grocery discount stores. However, a closer examination
reveals that Lidl follows a so-called soft discount strategy, where the product
assortment in the stores is enlarged to almost 4000 items and customers are offered
branded products and store brands.29 Statistics show that Lidl’s soft discount
concept has been successfully expanded: in 2014, Lidl operated more than 10,000
stores in 26 countries and generated sales of approximately € 62.7 billion globally.30
Approximately 32% of the sales were achieved in Germany, and approximately 68%
of the sales were generated in other European markets.31 Figure 3 presents a
comparison of Aldi’s and Lidl’s key operating figures.
Nevertheless, with regard to sales volume and the number of stores both in
Germany and globally, today, Lidl remains in number two behind its rival, Aldi.
However, on a European level, the company has already taken the lead with regard to
the number of stores: Lidl operates approximately 10,000 stores, whereas Aldi
operates only 8100 stores.32

25
See Anonymous (2017).
26
See Keuchel and Kolf (2016, p. 6).
27
See Planet Retail (2008).
28
See Lebensmittel Zeitung (2007, p. 28).
29
See Anonymous (2005, p. 17, 2014b)
30
See Kolf and Ludowig (2015, p. 1).
31
See Seidel (2015, p. 6.)
32
See Anonymous (2005, p. 17) and Jensen and Schwarzer (2014a, p. 30).
Aldi and Lidl: From Germany to the Rest of the World 87

Aldi Lidl
Founding year 1962 1973
Business model hard discount soft discount
Sales volume (bn €) in 2014 65.1 62.7
- thereof Germany 27.6 (~ 42%) 20.3 (~ 32%)
- thereof European foreign markets 20.7 (~ 32%) 42.4 (~ 68%)
- thereof non-European foreign markets 16.8 (~ 26%) 0 (0%)
Number of stores in 2014 10,343 10,084
- thereof Germany 4,215 (~ 41%) 3,277 (~ 32%)
- thereof European foreign markets 3,951 (~ 38%) 6,807 (~ 68%)
- thereof non-European foreign markets 2,177 (~ 21%) 0 (0%)
Number of foreign markets in 2014 16 25
- thereof European foreign markets 14 (~ 88%) 25 (100%)
- thereof non-European foreign markets 2 (~ 12%) 0 (0%)

Figure 3 Comparison of Aldi’s and Lidl’s key operating figures. Source: Based on Lebensmittel
Zeitung (2015c, d, e) and Schmid et al. (2013, p. 544)

2 Internationalization Strategies of Aldi and Lidl

2.1 International Market Entry and Target Market Strategies

Aldi realized early that international expansion could be a key lever in enhancing
the company’s further growth. In 1967, the management decided to enter Austria by
acquiring the local grocery retailer Hofer.33 Then, from 1976 to 2014, Aldi
expanded into another 16 foreign markets.34 The expansion was not limited only
to Europe—10 years after the market entry into Austria, Aldi began to make gains in
the U.S. market, and in 2000, the grocery discounter extended its operations to
Australia.35
Unlike Aldi, Lidl limited its expansion to the German market first. Thereafter, in
the period from 1989 to 2014, the company entered 26 foreign markets and impressed
experts with its astonishing speed of internationalization. Additionally, Lidl seized
the opportunity to expand into a number of developing European markets, where no
competitor had previously been present. Aldi—in most cases—preferred to wait for a
retail sector to mature, whereas Lidl has been far more adventurous and began its
Eastern European expansion with the market entry into Poland in 2002. Figure 4
illustrates the international market presence and the number of stores in each country
of Aldi and Lidl.

33
See Lebensmittel Zeitung (2008).
34
See Lebensmittel Zeitung (2008) and Schmid et al. (2013, p. 549).
35
See Lebensmittel Zeitung (2008).
 88

144

173
225
98
113
1,810(1) 145 501
557 396
450
658
293
13 85
7 4,215 543
3,277

233
125
910
450(2)
1,529 175 100
204
101 166
= Number of Aldi Stores 75(2) 190
= Number of Lidl Stores 47
48
(1) In the U.S.A. about 435 of the 1,705 367
242 249 88
566 90
Aldi stores are operated by the 529
grocery retailer „Trader Joe’s”.
(2) In Austria and Slovenia Aldi stores
are labelled „Hofer“.
220

Reference date for all data and 6 16

information is end of 2014.

Figure 4 Aldi’s and Lidl’s market presence and number of stores in 2014. Source: Based on Lebensmittel Zeitung (2015d), Schmid et al. (2013, p. 546) and
S. Schmid et al.

Seidel (2015, p. 7)
Aldi and Lidl: From Germany to the Rest of the World 89

Lidl’s rapid expansion into Poland seems to have paid off: only 5 years later, in
2007, the company achieved sales of approximately € 759 million and was ranked
among the top three grocery discounters in the country. With this well-established
position, Lidl has a clear advantage over its rival, Aldi, which entered the Polish
market in 2008 and had to build up consumer trust and market share first. In 2014,
with 543 stores, Lidl generated sales of € 2854 million in Poland, whereas Aldi, with
85 stores, reached sales of only € 285 million.
Some of Aldi’s and Lidl’s market entries were a result of simple trial and error:36
oftentimes, the grocery retailers declined support from market research companies or
management consultancies and judged the attractiveness of a foreign market based
on their own managers’ gut feeling.
In 2008, Lidl was forced to realize the flaws of this strategy: after 4 years of
unsatisfactory sales, the company withdrew from the Norwegian market and sold its
50 stores to a local competitor, Rema.37 Norway’s unique geographic structure and
the distribution of its population were key factors that led to Lidl’s failure.38 The
thinly distributed population density in Norway required Lidl to build up several
central warehouses to ensure smooth supplies for each discount store in the country.
Consequently, logistics became more expensive, and the additional costs threatened
the profitability of Lidl’s stores.39 Werner Evertsen, head of Lidl Norway, explained
that the stores were closed because they offered no further development potential,
and he indicated that store location was a key issue that should have been checked
more carefully: “It can simply be a case of wrong location or too low population
density. Of course, we want to be where the population is.”40 In addition to these
mistakes, Lidl Norway had to cope with a high level of turnover among its top
managers. One of the country managers left the company 20 months after he had
signed his employment contract. The frequent change in Lidl’s top management and
the resulting uncertainty among the employees also negatively affected the long-
term strategic planning of the company.41
In 2010, for the first time in its history, Aldi decided to stop its operations in one
market it had entered before—Greece. Aldi sold all 38 stores, including 12 to Lidl,
which was an unexpected move for industry experts. Aldi announced that the
company wanted to strengthen its business in other European markets. Ever since,
Aldi has stayed away from the Greek market.42

36
See Brandes (2001, p. 123).
37
See von Schlautmann (2008).
38
See Dagens Næringsliv (2008).
39
See Biehl (2006).
40
Translated quotation that appeared in VG (2007).
41
See Jensen and Schwarzer (2009, p. 64).
42
See Anonymous (2010) and Jensen and Schwarzer (2012).
90 S. Schmid et al.

2.2 International Timing Strategies

Aldi’s internationalization pattern is characterized by phases of “action” and “recov-

ery”. In the past, the company entered one or more markets within a short period of
time and then paused its market entry activities for approximately 10 years.43 Since
2000, Aldi has accelerated the internationalization process and has entered approxi-
mately one new market per year until 2007. Between 2007 and 2014, Aldi entered
only three new markets—all of them in 2008: Greece, Hungary and Poland. In 2010,
Aldi withdrew from Greece. By contrast, Lidl acts much faster: although the
company started its internationalization very late in 1989, it entered 26 foreign
markets in the period between 1989 and 2014. On a country-wide level, the two
companies also pursued different strategies: Lidl opened up many stores in different
regions simultaneously, whereas Aldi entered foreign markets more carefully and
slowly—it began to build up stores by entering one region after another. In
Switzerland, for example, the grocery discounter started its operations in the
German-speaking regions first. Other districts followed successively. Figure 5
provides detailed information on the timing strategies of both firms.

2.3 Adaption to Local Needs

Aldi and Lidl decided to implement their grocery discount strategies not only in their
home country but also in all foreign markets. Nevertheless, both companies allow
local managers to adapt the product range according to country-specific demands. In
an attempt to increase consumer acceptance, Aldi, for example, re-labelled its
German products in Switzerland so that formerly German-branded items became
Swiss-branded goods.44 Additionally, in the U.S.A., Aldi stores typically do not sell
any German products at all. Only the famous German “Christstollen” and almond
paste are offered during the Christmas season.45 In the U.K., Lidl offers regional
products as well: approximately 90% of its meat and poultry are from the U.K. and
Ireland, and when in season, lots of the fruit and vegetables are British. Lidl
U.K. director Martin Bailie explains: “It’s not all pan-European buying; we have
to look at what U.K. customers want.”46
At first glance, this customer focus seems to conflict with the standardized
grocery discount concept. However, Aldi and Lidl realized that this adaptation to
local needs can help the grocery discounters to successfully develop a foreign
market. In Switzerland and in the U.K., where Aldi faced stiff competition from
local retailers,47 the company departed from the rigorous hard discount concept and

43
See Planet Retail (2008).
44
See Brestel (2005, p. 24).
45
See Anonymous (2004, p. 16).
46
Martin Bailie as cited in Creevy (2008).
47
See Hickmann (2008); Stock (2004); Van Den Steen and Lane (2014, p. 2).
 25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
L
Aldi and Lidl: From Germany to the Rest of the World

6 S
5 CZ
USA DK GR
H
4 B FIN H
L PL PL
3 DK E B AUS N P CYP
NL UK P IRL SK SLO BGR
2
A F F UK I NL A GR IRL E CH HR SLO M N CH GR ROU
1
0 \\ \\

1963
1964
1965
1966
1967
1974
1975
1976
1977
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Number of new market entries from Aldi Number of new market entries from Aldi accumulated Number of market exits from Aldi
Number of new market entries from Lidl Number of new market entries from Lidl accumulated Number of market exits from Lidl

A = Austria; AUS = Australia; B = Belgium; BGR = Bulgaria; CH = Switzerland; CYP = Cyprus; CZ = Czech Republic; DK = Denmark; E = Spain; F = France; GR = Greece; H =
Hungary; HR = Croatia; I = Italy; IRL = Ireland; L = Luxemburg; M = Malta; N = Norway; NL = Netherlands; P = Portugal; PL = Poland; ROU = Romania; S = Sweden; SK =
Slovakia; SLO = Slovenia; UK = United Kingdom.
91

Figure 5 Aldi’s and Lidl’s international market expansion until 2014. Source: Based on Anonymous (2010), Hecking (2014), Jensen and Schwarzer (2014a,
p. 30) and Schmid et al. (2009, 2010, 2013, p. 549)
92 S. Schmid et al.

launched advertising campaigns to convince customers to shop at Aldi.48 In addition

to the advertising campaigns, stores in Switzerland and in the U.K. were stocked
with a broader selection of meat and seafood products, more upscale frozen meals
and a new “food to go” counter.49 As Aldi adjusted its product assortment in the
U.K., it managed to overcome the reputation of an “underclass discounter”. It also
started to attract savvy middle-class customers shopping at Aldi in the U.K.50

3 Outlook and Future Trends

Aldi’s and Lidl’s success in their home market of Germany is beyond dispute.
However, both companies realized that, if they insisted on maintaining their original
discount format, they might have limited growth prospects abroad. With their altered
product and service strategies in the U.K. and in Switzerland, Lidl and Aldi are
trying to meet the requirements of their demanding local customers. Aldi managers
also retain their pricing strategy in those countries where Aldi heads upmarket,
whereas Lidl has slightly increased the sales price for some of its products. It will
be interesting to observe whether the grocery retailers will implement these
strategies in other foreign markets as well. Market entries that may follow in the
future could serve as an indicator for the strategic development of the two rivals.
In 2011/12, Aldi extended its existing store network in Poland and Hungary.
Furthermore, Aldi announced plans to enter Romania and the Czech Republic in the
years to come.51 Among the countries for potential future market entry are Turkey,
Russia, New Zealand and South Africa. Taking a closer look at the market potential
of selected foreign countries, it must be noted that, in general, Brazil, Russia, India
and China (i.e., the BRIC countries) offer the most promising opportunities for
growth. Despite some recent economic volatility, India and China may play a central
role because of their strong economic development, rising population and increasing
prices in the grocery retail industry.52 For instance, forecasts estimate that there will
be more than 200 Chinese cities with a population of more than one million people
by 2025. As of 2014, neither Aldi nor Lidl is present in the Chinese market, whereas
competitors, such as Wal-Mart, Carrefour and Tesco, have already entered China.53
In 2014, Auchan was the largest foreign grocery retail chain operating in China, with
a sales volume of € 7.1 billion, followed by Wal-Mart with a sales volume of € 6.5
billion.54 Wal-Mart runs a wide range of different store formats in China such as

48
See Comtesse (2017) and Heilmann (2008).
49
See Aldi (2016) and Ough (2016).
50
See BBC (2014).
51
See Rudolph and Meise (2012, p. 147).
52
See Anonymous (2011a), Hein (2012, p. 14), Jensen and Schwarzer (2014b) and PwC (2012,
p. 21).
53
See Anonymous (2012).
54
See Anonymous (2013).
Aldi and Lidl: From Germany to the Rest of the World 93

Wal-Mart Supercenter and Sam’s Club.55 Similar to many foreign markets the
Chinese market is challenging: first, the growth of the Chinese economy is slowing
down; second, Chinese brands dominate the retail industry; and third, the market is
highly fragmented, especially in smaller cities.56 India seems to be even more
difficult for foreign companies; for instance, in 2014, Carrefour left India only
4 years after having opened some cash and carry stores.57
Currently, Aldi is investigating the Chinese market with regard to possible market
entry strategies. However, experts are very sceptical whether the Chinese population
will accept Aldi because Chinese grocery shopping culture is strongly driven by
customer preferences for branded goods.58 In 2010, discounters accounted for only
0.1% of China’s total grocery retail sales59; and sales in the discount segment are
expected to grow by almost 1% per year between 2015 and 2020.60
Lidl is not holding off and is preparing to enter the U.S. market with more than
100 stores in the Washington area.61 This plan is a reaction to Aldi, which is heavily
investing in the U.S. to increase the number of stores to 2000 by 2018. In addition,
Lidl intends to start operations in Lithuania and Serbia to strengthen its European
position.62
In addition to their expansion into new foreign markets, Aldi and Lidl have begun
to extend their grocery store driven business model. For instance, Aldi offers mobile
phone contracts and hosts travel websites and online flower shops.63 Lidl has started
to sell high-quality wines, technical equipment, and “home and living” articles.
Additionally, Lidl provides a “weekly special” in its online shop to advertise both
in-store products and items that are only available online.64
It is likely that the consumer trend of shopping online will require retailers to adjust
their sales and distribution strategies. In 2014, Lidl generated € 163.6 million in
online sales. In the discount segment, online advertising is also increasingly impor-
tant.65 In 2011, Aldi cut its investments in print advertisement by € 130 million;
traditional print advertisement has been partially replaced by online advertisement.66
Industry experts expect that the “grocery discount stores of the future” will have to be
more connected to online shopping technologies. It may also be possible that the
grocery discounters will face competition from new (or recent) entrants such as

55
See Anonymous (2016).
56
See Euromonitor (2016).
57
See Anonymous (2014b).
58
See Jensen and Schwarzer (2014a).
59
See Anonymous (2011b).
60
See Anonymous (2011a).
61
See Anonymous (2014c).
62
See Seidel (2015).
63
See Anonymous (2014d), Hielscher (2015) and Louven (2005).
64
See Anonymous (2014e, p. 18).
65
See Anonymous (2015c).
66
See Kontio (2013).
94 S. Schmid et al.

Amazon and eBay or even Google. These firms are well established in the
e-commerce business or in the internet industry in general and may have the power
to establish new rules in the grocery retail industry.67

Questions

1. Mintzberg states that, in addition to planned strategies, we can also find emergent
strategies.
(a) What evidence do you observe for the emergent character of strategies in
the case of Aldi and Lidl? What reasons may be behind the fact that not
all of Aldi’s and Lidl’s strategies were carefully planned?
(b) Do you believe that Aldi and Lidl would have been equally or even more
successful if they had planned their strategies more carefully? Please
justify your reasoning.

2. Porter distinguishes between cost leadership, differentiation and focus strategies.

(a) How would you characterize Aldi’s and Lidl’s strategies in terms of
Porter’s strategy options?
(b) What are the advantages and disadvantages of Aldi’s and Lidl’s
strategies compared to other strategic alternatives (in terms of Porter’s
strategy options)?

3. One option within internationalization strategies is greenfield investment.

Although Aldi and Lidl entered some foreign markets via acquisitions (see, for
instance, the acquisition of Hofer by Aldi in Austria in 1967), they mostly opt for
greenfield investments.
(a) Please discuss the reasons why Aldi and Lidl are choosing greenfield
investments as their primary market entry strategy.
(b) If you were a member of the Aldi or Lidl top management team, would
you recommend alternative market entry strategies in the future? Please
justify your reasoning.

4. Both Aldi and Lidl are active in the discounter segment of the retail market.
Simultaneously, there are similarities and differences between the two firms.
(a) Please establish an international SWOT analysis for Aldi and Lidl. To
simplify your analysis, please focus on the home market of Germany and
two other foreign markets. You are invited to use the information from
the case and additional sources.

67
See Preuß (2017, p. 2).
Aldi and Lidl: From Germany to the Rest of the World 95

(b) Please illustrate the similarities and differences of the two firms based on
your SWOT analysis.
(c) Based on your SWOT analysis, which company (i.e., Aldi or Lidl) will,
in your opinion, be more successful over the next 10 years? Please use
several criteria that help you define and operationalize success.
(d) What recommendations would you give Aldi and Lidl with regard to
their strategic development for the next 10 years? Please elaborate in
detail on corporate, business and selected functional strategies.

Please note that, for some of the questions, the case study is only a starting point.
You will have to search for additional information to answer the questions.

References
Aldi. (2016). Press releases: Aldi Set to REEL in customers with new chilled seafood lines. Website of
Aldi. Accessed May 23, 2017, from https://www.aldipresscentre.co.uk/press-releases/view/176
Anonymous. (2003). Lidl hängt Aldi beim Wachstum ab. Website of Spiegel Online. Accessed
August 4, 2008, from http://www.spiegel.de/wirtschaft/0,1518,270587,00.html
Anonymous. (2004, June 5). Aldi im Wal-Mart-Land. Frankfurter Allgemeine Zeitung, p. 16.
Anonymous. (2005, June 16). Lidl-Gruppe wächst um 40 Prozent. Frankfurter Allgemeine Zeitung,
p. 17.
Anonymous. (2010). Aldi verlässt Griechenland. Website of Handelsblatt. Accessed June 20, 2016,
from http://www.handelsblatt.com/unternehmen/handel-konsumgueter/rueckzug-aldi-verlaesst-
griechenland/3492242.html
Anonymous. (2011a). Durchschnittliche jährliche Wachstumsrate im Lebensmitteleinzelhandel in
China zwischen 2000 und 2010 und Prognose für 2010 bis 2015 nach Segmenten. Website of
Statista. Accessed June 22, 2016, from http://de.statista.com/statistik/daten/studie/217008/
umfrage/wachstumsrate-im-lebensmitteleinzelhandel-in-china-nach-segmenten/
Anonymous. (2011b). Grocery retail revenue distribution in China in 2010, by segment. Website of
Statista. Accessed June 22, 2016, from http://www.statista.com/statistics/277354/grocery-retail-
revenue-distribution-in-china-by-segment/
Anonymous. (2012). Was deutsche Firmen sich in China erhoffen. In: Website of Handelsblatt.
Accessed June 22, 2016, from http://www.handelsblatt.com/unternehmen/industrie/chancen-
und-risiken-was-deutsche-firmen-sich-in-china-erhoffen/7067596.html
Anonymous. (2013). Leading foreign retail chain operators in China by retail sales in 2013.
Website of Statista. Accessed May 8, 2015, from http://www.statista.com/statistics/289220/
china-leading-foreign-retail-chain-operators/
Anonymous. (2014a). Produkte, Filialen, Marktmacht: Das unheimliche Geflecht der Supermarkt-
Riesen. Website of Focus. Accessed June 20, 2016, from http://www.focus.de/finanzen/news/
so-kaufen-wir-ein-schlechtere-qualitaet-weniger-auswahl-wie-diese-vier-supermarkt-riesen-
unseren-einkauf-diktieren_id_4159487.html
Anonymous. (2014b). Retail giant carrefour to exit India, shut down 5 stores. Website of The
Times of India. Accessed June 22, 2016, from http://timesofindia.indiatimes.com/business/
india-business/Retail-giant-Carrefour-to-exit-India-shut-down-5-stores/articleshow/37980823.
cms
Anonymous. (2014c). Discounter feilt an Einstieg in US-Markt. Website of Handelsblatt. Accessed
June 22, 2016, from http://www.handelsblatt.com/unternehmen/handel-konsumgueter/lidl-will-
expandieren-discounter-feilt-an-einstieg-in-us-markt/11158468.html
96 S. Schmid et al.

Anonymous. (2014d). So reisen Sie günstig mit Aldi-Fernbussen durch die Welt. Website of Focus.
Accessed June 20, 2016, from http://www.focus.de/finanzen/news/unternehmen/aldi-reisen-so-
reisen-sie-guenstig-mit-aldi-fernbussen-durch-die-welt_id_3698109.html
Anonymous. (2014e, December 3). Deutschlands Discounter sind angriffslustig wie lange nicht
mehr. Frankfurter Allgemeine Zeitung, p. 18.
Anonymous. (2015a). Forecast for global retail sales growth from 2008 to 2018. Website of
Statista. Accessed June 22, 2016, from http://www.statista.com/statistics/232347/forecast-of-
global-retail-sales-growth/
Anonymous. (2015b). Umsatzverteilung im Lebensmitteleinzelhandel in Deutschland nach
Betriebsformen in den Jahren 2004 bis 2014. Website of Statista. Accessed June 28, 2016, from
http://de.statista.com/statistik/daten/studie/6310/umfrage/umsaetze-im-lebensmitteleinzelhandel
-seit-2004/
Anonymous. (2015c). Umsatz der 100 größten Online-Shops in Deutschland im Jahr 2014.
Website of Statista. Accessed June 22, 2016, from http://de.statista.com/statistik/daten/studie/
170530/umfrage/umsatz-der-groessten-online-shops-in-deutschland/
Anonymous. (2016). Walmart needs to grow overseas, and China’s the big prize. Website of
Chicago Tribune. Accessed May 23, 2017, from http://www.chicagotribune.com/business/ct-
walmart-china-20160601-story.html
Anonymous. (2017). Umsatz von Aldi weltweit in den Jahren 2006 bis 2015 (in Millionen
US-Dollar). Website of Statista. Accessed May 10, 2017, from https://de.statista.com/statistik/
daten/studie/504231/ umfrage/umsatz-von-aldi-weltweit/
BBC. (2014). Five ways Aldi cracked the supermarket business. Website of BBC. Accessed 22 June
2016). http://www.bbc.com/news/blogs-magazine-monitor-28421722
Biehl, B. (2006, August 18). Mission discount. Lebensmittel Zeitung, pp. 5–6.
Borger, S. (2015, September 17). Brutaler Preiskampf: Die deutschen Discounter Aldi und Lidl
bringen die britischen Einzelhändler in Nöte. Berliner Zeitung, No. 217, p. 9.
Brandes, D. (2001). Konsequent einfach – Die Aldi Erfolgsstory (4th ed.). Frankfurt/Main: Campus.
Brandes, D., & Brandes, N. (2015). Bare essentials: The Aldi success story. Wien: Linde Verlag.
Brestel, H. (2005, November 5). Der Aldi-Effekt. Frankfurter Allgemeine Zeitung, p. 24.
Colla, E. (2003). International expansion and strategies of grocery discount retailers: The winning
models. International Journal of Retail & Distribution Management, 31(1), pp. 55–66.
Comtesse, M. (2017). Hier kommen die Aldi-Kinder. Website of Berner Zeitung. Accessed May
23, 2017, fromhttp://www.bernerzeitung.ch/wirtschaft/unternehmen-und-konjunktur/Hier-
kommen-die-AldiKinder/story/22548164
Creevy, J. (2008). Martin Bailie: A Lidl goes a long way. Website of Retail Week. Accessed June
22, 2016, from http://www.retail-week.com/martin-bailie-a-lidl-goes-a-long-way/1892190.
fullarticle
Dagens Næringsliv. (2008). Derfor Floppet Lidl. Website of Dagens Næringsliv. Accessed June
22, 2016, from https://www.dn.no/nyheter/naringsliv/2008/03/14/derfor-floppet-lidl
Dawson, J. (2000). Retailing at century end: Some challenges for management and research. The
International Review of Retail, Distribution and Customer Research, 10(2), pp. 119–148.
Euromonitor. (2016). Grocery retailers in China. Website of Euromonitor. Accessed June 22, 2016,
from http://www.euromonitor.com/grocery-retailers-in-china/report
Hecking, M. (2014, July 28). Das Albrecht-Vermächtnis. Wirtschaftswoche, pp. 46–49.
Heilmann, D. (2008). Briten entdecken Aldi und Lidl. Website of Handelsblatt. Accessed September
10, 2008, from http://www.handelsblatt.com/unternehmen/handel-dienstleister/briten-entdecken-
aldi-und-lidl;2034251
Hein, C. (2012, December 10). Indien öffnet Lebensmittelhandel. Frankfurter Allgemeine Zeitung,
p. 14.
Hickmann, M. (2008). Aldi and Lidl Head Upmarket in Britain. Website of Bloomberg. Accessed
June 22, 2016, from http://www.bloomberg.com/news/articles/2008-10-21/aldi-and-lidl-head-
upmarket-in-britainbusinessweek-business-news-stock-market-and-financial-advice
Aldi and Lidl: From Germany to the Rest of the World 97

Hielscher, H. (2015). Lidl schlägt Aldi im Internet. Website of Handelsblatt. Accessed June
22, 2016, from http://www.handelsblatt.com/unternehmen/handel-konsumgueter/discounter-
rivalen-lidl-schlaegt-aldi-im-internet/12273390.html
Institute of Grocery Distribution. (2011). European discount retailing: Traditional classification of
the discount channel. Website of IGD. Accessed June 22, 2016, from http://www.igd.com/
Research/Retail/European-discount-retailing/
Jensen, S., & Schwarzer, U. (2009, November). Alles außer Tritt. Manager Magazin, pp. 63–66.
Jensen, S., & Schwarzer, U. (2012). Discount-Krösus Aldi macht mobil. Website of Manager
Magazin. Accessed June 22, 2016, from http://www.manager-magazin.de/magazin/artikel/a-
825498.html
Jensen, S., & Schwarzer, U. (2014a, May). Panik-Attacken. Manager Magazin, pp. 28–34.
Jensen, S., & Schwarzer, U. (2014b). Aldi expandiert nach China. Website of Manager Magazin.
Accessed June 22, 2016, from. http://www.manager-magazin.de/unternehmen/handel/aldi-
expandiert-nach-china-a-1003921.html
Keuchel, J., & Kolf, F. (2016, June 2). Am Nasenring durch die Manege. Handelsblatt, pp. 1, 4–7.
Kolf, F., & Ludowig, K. (2015, November 10). Attacke auf Aldi. Handelsblatt, p. 1.
Kontio, C. (2013). Aldi Süd setzt massiv auf Online-Werbung. Website of Handelsblatt. Accessed
June 22, 2016, from http://www.handelsblatt.com/unternehmen/handel-konsumgueter/abkehr-
von-print-aldi-sued-setzt-massiv-auf-online-werbung/8017860.html
Lebensmittel Zeitung. (2007). Der Lebensmitteleinzelhandel in Europa 2007. Frankfurt/Main:
Deutscher Fachverlag.
Lebensmittel Zeitung. (2008). Unternehmensportrait der Aldi Gruppe. Website of Lebensmittel
Zeitung. Accessed October 10, 2008, from http://www.lz-net.de/unternehmen/handel/pages/
protected/show.prl?params¼suchid%3D643217%26quelle%3D2&id¼83&currPage¼
Lebensmittel Zeitung. (2015a). Top 10 Lebensmittelhandel Europa 2015. Website of Lebensmittel
Zeitung. Accessed June 22, 2016, from http://www.lebensmittelzeitung.net/handel/Top-10-
Lebensmittelhandel-Europa-2015-119237
Lebensmittel Zeitung. (2015b). Top 10 Lebensmittelhändler Welt 2015. Website of Lebensmittel
Zeitung. Accessed 27 June 27, 2016, from http://www.lebensmittelzeitung.net/handel/Top-10-
Lebensmittelhaendler-Welt-2015-119207
Lebensmittel Zeitung. (2015c). Top 6 Discounter Deutschland 2015. Website of Lebensmittel
Zeitung. Accessed 22 June 22, 2016, from http://www.lebensmittelzeitung.net/handel/Top-6-
Discounter-Deutschland-2015-119206
Lebensmittel Zeitung. (2015d). Aldi und Lidl in Europa: Marktanteile, Umsätze und Filialen.
Website of Lebensmittel Zeitung. Accessed 27 June 27, 2016, from http://www.
lebensmittelzeitung.net/handel/Europa-Karte-von-Aldi-und-Lidl-Marktanteile-Umsaetze-und-
Filialen-im-Vergleich-120205
Lebensmittel Zeitung. (2015e). Top 10 Discounter Welt 2015. Website of Lebensmittel Zeitung.
Accessed 22 June 22, 2016, from http://www.lebensmittelzeitung.net/handel/Top-10-Dis
counter-Welt-2015-119231
Liebmann, H.-P., & Zentes, J. (2001). Handelsmanagement. München: Vahlen.
Lingenfelder, M. (1995). Die Europäisierung des Lebensmitteleinzelhandels im Lichte politisch-
rechtlicher und gesamtwirtschaftlicher Entwicklungen. In H. Bauer & H. Diller (Eds.), Wege des
Marketing, Festschrift zum 60. Geburtstag von Erwin Dichtl (pp. 267–306). Berlin: Duncker &
Humblot.
Louven, S. (2005). Aldi setzt Mobilfunkbranche unter Druck. Website of Handelsblatt. Accessed June
22, 2016, from http://www.handelsblatt.com/unternehmen/it-medien/kampf-um-marktanteile-
aldi-setzt-mobilfunkbranche-unter-druck/2587620.html
Nielsen. (2002). Universen 2001 – Daten zum Handel in Deutschland. Website of Nielsen.
Accessed October 14, 2008, from http://de.nielsen.com/pubs/documents/universen_2001.pdf
Nielsen. (2008). Universen 2008 – Handel und Verbraucher in Deutschland. Website of Nielsen.
Accessed July 22, 2008, from http://de.nielsen.com/site/documents/Universen_2008.pdf
98 S. Schmid et al.

Nielsen. (2015). Deutschland 2015: Handel, Verbraucher, Werbung. Website of Nielsen. Accessed
June 22, 2016, from http://www.nielsen.com/content/dam/nielsenglobal/eu/nielseninsights/
pdfs/Universen_D_2015_Internet.pdf
Olbrich, R., & Peisert, R. (2004). Die Wahl internationaler Standorte durch europäische
Handelsunternehmen: Strategiemuster, empirische Befunde und Handlungsempfehlungen. In
A. Dieter, O. Rainer, & S. Hendrik (Eds.), Internationalisierung von Vertrieb und Handel (pp.
43–64). Frankfurt am Main: Deutscher Fachverlag.
Ough, T. (2016). Price cuts weigh on Aldi’s profits as it unveils £300m upgrade for stores. Website
of Telegraph. Accessed May 23, 2017, from http://www.telegraph.co.uk/business/2016/09/26/
price-cuts-weigh-on-aldis-profits-as-it-unveils-300m-upgrade-for/
Peitsmeier, H., & Heeg, T. (2004, December 12). Die Discounter unter Druck. Frankfurter
Allgemeine Sonntagszeitung, p. 35.
Planet Retail. (2008). Global Retailing Information. Website of Planet Retail. Accessed October
14, 2008, from http://www.planetretail.net/OnlineShop/RetailShopHome.aspx?Section¼1&
PType¼1&PageID¼1&ProfileTypeID¼1
Preuß, S. (2017, February 17). Lidl wartet ab. Frankfurter Allgemeine Zeitung, p. 22.
PwC. (2012). PwC-Exportbarometer der deutschen Ernährungsindustrie. Website of
PricewaterhouseCoopers. Accessed 22 June 22, 2016, from http://www.pwc.de/de/handel-und-
konsumguter/assets/pwc_ exportbarometer_der_deutschen-ernaehrungsindustrie_mai_2012.pdf
Roth, T. (2016). Battle of the giants: How Germany’s retailers are conquering the world.
Handelsblatt, global edition, Spring/Summer 2016, No. 1/16, pp. 32–38.
Rudolph, T., & Meise, J. N. (2012). More with less: The Aldi approach for European retailing. In T.
Rudolph, B. B. Schlegelmilch, J. Franch, A. Bauer, & J. N. Meise (Eds.), Diversity in European
retailing: Text and cases (pp. 141–153). Wiesbaden: Springer Gabler.
Schmid, S., Dauth, T., & Kotulla, T. (2009). Die Internationalisierung von Aldi und Lidl –
Möglichkeiten und Grenzen bei der Übertragung von im Inland erfolgreichen
Geschäftsmodellen auf das Ausland. Working Paper No. 46, ESCP-EAP Wirtschaftshochschule
Berlin, Berlin.
Schmid, S., Dauth, T., & Kotulla, T. (2010). Aldi and Lidl: International expansion of two German
grocery discounters. In P. Ghauri & P. Cateora (Eds.), International marketing. (3rd European
ed., pp. 566–571). Maidenhead: McGraw-Hill.
Schmid, S., Dauth, T., & Kotulla, T. (2013). Aldi und Lidl: Zwei deutsche Discounter auf
Expansionskurs. In S. Schmid (Ed.), Strategien der Internationalisierung (3rd ed.,
pp. 533–579). München: Oldenbourg.
Seidel, S. (2015, November 10). Kampf der Discounter. Handelsblatt, pp. 4–7.
Stock, O. (2004). Aldi greift in der Schweiz an. Website of Handelsblatt. Last accessed June
20, 2016, from. http://www.handelsblatt.com/unternehmen/handel-konsumgueter/schweiz-gilt-
als-attraktiver-aber-schwieriger-markt-aldi-greift-in-der-schweiz-an/2339872.html
Twardawa, W. (2006). Die Rolle der Discounter im deutschen LEH. Marken und Handelsmarken
im Wettbewerb der Vertriebskanäle für Konsumgüter. In J. Zentes (Ed.), Handbuch Handel:
Strategien-Perspektiven-Internationaler Wettbewerb (pp. 377–393). Wiesbaden: Gabler.
Van den Steen, E., & Lane, D. (2014). Aldi: The dark horse discounter. Case study by Harvard
Business School, Reference No. 2—714—474.
VG. (2007). Lidl stenger fem butikker i Norge. Website of VG. Accessed June 22, 2016, from
http://www.vg.no/nyheter/innen riks/mat/lidl-stenger-fem-butikker-i-norge/a/140864/
von Schlautmann, C. (2008). Lidl zieht sich erstmals aus einem Land zurück. Website of
Wirtschaftswoche. Accessed August 4, 2008, from http://www.wiwo.de/handelsblatt/lidl-
zieht-sich-erstmals-aus-einemland-zurueck-269979
Warschun, M., & Schmidt, P. (2011, July). What traditional retailers can learn from the discounters.
Chicago: A.T. Kearney.
White, A. (1995). Cross-border retailing: Leaders, losers and prospects. Financial times manage-
ment report. London: Pearson.