When Lidl entered the Spanish market 25 years ago, the discounter was found only in Mallorca, on the Costa Brava or in Andalusia - that is, where German tourists spent their holidays. The German discounter now has a total of 600 branches throughout Spain, including in large cities such as Madrid or Barcelona, where it has a large number of branches. The supermarket chain convinces above all with its low prices and with its special concept.
Expansion with potential
Lidl invested around nine million euros in the opening of two new branches in Barcelona alone. A considerable amount, which shows how important the expansion abroad is to the discounter. In Germany, there is a dense network of supermarkets, drugstores and discounters, which limits the scope of food companies. Therefore Lidl tries to expand its business abroad, in order to exploit the international potential. With success: In Spain, Lidl can keep up with strong domestic competitors and is showing an impressive development.
Quality and low prices
Up to 12,500 employees are employed in Spanish Lidl branches; the discounter has revenues of over three billion euros annually. According to research institute Kantal World Panel, Lidl is one of the food companies that can gain the most new customers in Spain. The discounter owes this mainly to his special business concept, which differs from the native Spanish chains. In Lidl branches, for example, there are special tables with various promotional products, which is a new concept in Spain. In addition, Lidl scores with high-quality private labels and its organic range.
In addition to great advertising, it is also the failure of domestic supermarket chains such as Dia or Eroski, that contributed to the success of the German discounters. Only Mercadona is one of the few Spanish supermarkets, that is a success story, but this also had to accept some losses due to the German competition. Especially because Lidl advertises, along with its low prices, increasingly great quality and fresh products.
Changed purchasing behavior of the Spaniards
Last but not least, it is the changing purchasing behavior of the Spaniards, that Lidl makes use of. While big brands enjoyed great popularity until 2007, the great financial and economic crisis caused major upheavals. Since then, Spanish consumers are more price-conscious. An unemployment of around 14 percent has also contributed to this development.