Apr. 15 - The increasing popularity of Germany's discount retailers Aldi and Lidl has hurt many big grocers in the UK and beyond. Joanna Partridge looks at why they are having such an impact.
They're called the Robin Hoods of retail. Pile it high, sell it cheap has proved successful for Aldi and Lidl. And the German-owned discount grocers have now made their mark on Britain's supermarket space. They're increasing the pressure on the UK's "Big Four" says Edward Garner from Kantar Worldpanel. SOUNDBITE: Edward Garner, Director, Kantar Worldpanel, saying (English): "The austerity environment has been a very fertile environment for people like Aldi and Lidl to grow because obviously one of the top-line messages is low price. They've been building lots of stores which also helps." The discount concept is nothing new - nor are the two firms. PTC Lidl can trace its history back to the 1930s, when it was founded as a grocery wholesaler. The first store with the Lidl name opened in 1973 and it was well-known throughout Germany by the 1980s. Lidl began to open international stores in the 1990s. PTC Aldi's story began in 1914, when Anna Albrecht opened a small food shop in Germany. By 1948 her sons had taken over the business and their first self-service food store opened in 1954. Aldi began its international expansion in the U.S. in 1976. The two firms are still privately-owned, and have a reputation for secrecy, says Matthias Queck from Planet Retail. SOUNDBITE: Matthias Queck, Research Director, Planet Retail, saying (English): "In the past it contributed to their success that they didn't say much about their business because very often they were simply they were underestimated, undervalued by their competitors who didn't really believe in the success of this concept. But this is changing now and this means in future they will have to say more about what they do, what their plans are, as they are growing and become major companies in all markets where they are." Few in Britain know Aldi isn't one company. GFX Anna Albrecht's two sons had a dispute in the 60s, and divided it. They split Germany down the middle - and carved up the world. With Aldi Nord taking care of countries like France, Denmark and Portugal - and the Trader Joe's brand in the U.S. While Aldi Sued operates in places like Switzerland, the UK, Australia and the U.S. Many consumers can't say Aldi without saying Lidl but they are very different firms. SOUNDBITE: Matthias Queck, Research Director, Planet Retail, saying (English): "I Aldi is far more conservative, far more sticking to its original concept, whereas Lidl is more opportunistic, more open, more flexible to elements taken from normal supermarkets, I would say. This has given Lidl some success in many markets, but sometimes you can also see that Aldi is a bit more successful, because they are a bit more stringent, more focussed." That's a rivalry that now could now go Stateside - as Lidl considers a move into the U.S. in 2015.