Discount Retail Chain Aldi and Lidl have rested on their laurels for too long. They are now in danger of losing touch with important future trends. The discounter giants are losing market share in the non-food business to competitors such as Action and Woolworth.
Many still remember the long queues in front of the discount stores when Aldi first offered computers. In this way, the retailer made a decisive contribution to the fact that the computer became a mass product and found its way into all households.
But it's been a long time since the discounters inspire the masses with their promotional goods and are at the forefront of product trends. Today, they are lagging behind in the non-food business, market shares are shifting to new competitors such as Action and online retailers such as Temu.
This affects Lidl in particular. As successful as the retailer is with food, especially in Germany, he has a hard time with his promotional assortment from cheap pans to sports shirts. But that was foreseeable, because the discounters have neglected one of their most important virtues.
What distinguished Lidl and Aldi for years was a sense of what the average customer wants. With a high hit rate, they brought sought-after products into their rummage baskets at the right time and made good profits both with seasonal goods and with timeless bestsellers.
But the large discounters have rested on these successes for too long and overlooked the fact that customer habits are fundamentally changing. Young consumers in particular are losing interest in the standard assortment. Inspired by social media, they want current trend products - and not the same striped swimming trunks every bathing season.
The non-food customers of Aldi and Lidl are getting older and older
However, discounters find it difficult to adapt to the rapid change in trend because of their long planning horizons. And customers can reliably get the basic range from toilet brushes to felt-tip pen sets at Action and Woolworth at any time - and not only when Lidl happens to have it in the promotion.
Almost six million receipts evaluated: Aldi, Lidl and Co. are increasingly getting into a price spiral
As a result, the non-food clientele of discounters is getting older and older, and young consumers are reorienting themselves. So it is only logical that Aldi Süd already had rollators on offer. But the discounters do not solve their future problems in this way.
It is significant that Lidl apparently does not get a foot on the ground in online business either. Sales are stagnating at a comparatively low level, and losses are expected to pile up. Things don't look any better at Aldi. Online, the retailer sells just a small part of its promotional goods, and it does not make any significant business with it.
Aldi and Lidl must now decide. They could give up the non-food business, but would then have to do without the profit margins, which in this product group are many times higher than the margins in the food business.
The alternative would be to fundamentally change the promotional business so that they can react more quickly to trends and changing customer wishes. Muddling through as before is no longer possible.
Read more: Kommentar: Lidl und Aldi lassen sich vom Konkurrenten Action vorführen (handelsblatt.com)
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