Two student grocery staples – online shopping and Lidl – are set to combine and offer UK residents some of the cheapest grocery products straight to their door.
Don’t ditch ASDA just yet, though – currently this is all just speculation based on a job posting by Lidl for a new digital project manager who will lead a “new online platform” and “drive online sales”. This came after Lidl management told The Grocer in June how it was “actively exploring” launching online shopping.
Rival German discounter Aldi has recently branched into online shopping, though this is limited, with this option only being available for wine, spirits, Specialbuy products and its everyday collection range; groceries are not available for delivery.
Despite arriving relatively late to the online shopping market, the rapid growth of German discounters Aldi and Lidl doesn’t seem to show any signs of stopping according to statistics by Kantar. Lidl is now the UK’s seventh largest supermarket, having overtaken Waitrose to reach a 6% total market share, which is a very considerable growth from 5.2% in 2018. Aldi currently has an 8.1% share of the market while the “Big Four” – Tesco, Sainsbury’s, Asda and Morrisons – continue to experience a gradual decline in market share, holding just 62.7% of the market, which is a 15-year low.
Since launching in the UK in 1994, 21 years after its founding in Germany, Lidl has expanded to now boast 760 UK stores with over 22,000 employees. Not many of these, however, are in Newcastle. Closest to most student accommodation are the Walkergate and recently opened South Gosforth stores, though for most students these are either a cycle, bus journey or taxi ride away – and after paying for this transport, a trip to Lidl would roughly equate to buying the same groceries from the slightly more expensive supermarkets on Northumberland Street or in West Jesmond. Launching online shopping, therefore, would revolutionise this, and make Lidl an even more attractive supermarket offering to many students.
Lidl has clearly displayed its ability to reap in the profits without turning to online shopping.
Will Lidl be able to sustain this online shopping, though? While this market offers great potential, with Mintel reporting that the UK spent £12.3bn on online groceries in 2018, such a delivery service can often be very expensive for supermarkets to run and greatly restricts their profits. Brittain Ladd, a food retail consultant, stated that “it is truly one of the worst business models in existence. Retailers simply do not have the competence to deliver to homes profitably.” Indeed, this may be why Lidl has waited so late to launch into the market – Morrisons, despite being UK’s fourth-biggest supermarket by revenue, only introduced online shopping in 2013, and Marks & Spencers only earlier this year. Lidl has clearly displayed its ability to reap in the profits without turning to online shopping. With pressure to introduce low or even free delivery charges, retailers are continually trying to undercut each other with regards to both delivery charges and minimum online spends, despite the extra costs associated with delivery making these transactions much less profitable for supermarkets than in-store purchases. Will Lidl raise products prices to reflect this, or maintain more realistic delivery charges for customers in the hope that their low product prices will continue to make them more attractive to their competitors? Only time will tell, but with Lidl stores now prevalent in every member state of the European Union except Latvia and Estonia, the German giant will only continue to grow.
Last modified: 21st May 2020