Lidl

Lidl Stiftung & Co. KG (German pronunciation: [ˈliːdl̩]; UK: /ˈlɪdəl/ LID-əl) is a German international discount supermarket chain[1] that operates over 10,000 stores across Europe and the United States.[2] Headquartered in Neckarsulm, Baden-Württemberg, the company belongs to the Schwarz Group, who also operates the hypermarket chain Kaufland.

Not to be confused with Liddle or Liddell.

Lidl Stiftung & Co. KG
Lidl
Private Kommanditgesellschaft with a stiftung foundation as general partner
IndustryRetailing
Founded1930 (1930)
FounderJosef Schwarz
Headquarters
Neckarsulm
,
Germany
Number of locations
10,000+ in 28 European countries and the United States
Area served
Europe
United States
Key people
Ignazio Paternò (CEO) Dieter Schwarz (Chairman)
ProductsDiscount store
Revenue€ 89.869 billion
€ 1.951 billion
€ 1.287 billion
Total assets€ 36.706 billion
Number of employees
315,000
ParentSchwarz Gruppe
Websitelidl.com

Lidl is the chief competitor of a similar German discount chain Aldi in several markets, including the United States.[3] There are Lidl stores in almost every member state of the European Union. Lidl stores are also present in Switzerland, Serbia, the United Kingdom and the United States.

History
European countries in which Lidl is active

In 1930, Josef Schwarz became a partner in Südfrüchte Großhandlung Lidl & Co., a fruit wholesaler, and he developed the company into a general food wholesaler.[4]

In 1977, under his son Dieter Schwarz, the Schwarz-Gruppe began to focus on discount markets, larger supermarkets, and cash and carry wholesale markets. He did not want to use the name Schwarz-Markt (Schwarzmarkt means "black market") and rather use the name of Josef Schwarz's former business partner, A. Lidl, but legal reasons prevented him from taking over the name for his discount stores. When he discovered a newspaper article about the painter and retired schoolteacher Ludwig Lidl, he bought the rights to the name from him for 1,000 German marks.[5][6]

Lidl is part of the Schwarz Group, the fifth-largest retailer in the world with sales of €104.3 billion (2018).[7]

The first Lidl discount store was opened in 1973, copying the Aldi concept.[4] Schwarz rigorously removed merchandise that did not sell from the shelves, and cut costs by keeping the size of the retail outlets as small as possible. By 1977, the Lidl chain comprised 33 discount stores.

Lidl opened its first UK store in 1994. Since then, Lidl UK has grown consistently, and today has over 800 stores. While it is still a small player in the United Kingdom, with a grocery market share of less than 5%, its importance, along with that of continental, no-frills competitor Aldi is growing, with half of the shoppers in the United Kingdom visiting Aldi or Lidl over Christmas 2014.[8]

Sven Seidel was appointed CEO of the company in March 2014, after the previous CEO Karl-Heinz Holland stepped down.[9] Holland had served as chief executive since 2008 but left due to undisclosed "unbridgeable" differences over future strategy. Seidel stepped down from his position in February 2017 after Manager Magazin reported he had fallen out of favour with Klaus Gehrig, who has headed the Schwarz Group since 2004. Seidel was succeeded as CEO by Dane Jesper Højer, previously head of Lidl's international buying operation.[10]

In June 2015, the company announced it would establish a United States headquarters in Arlington, Virginia.[11] Lidl has major distribution centers in Mebane, North Carolina, and Spotsylvania County, Virginia. The company initially focused on opening locations in East Coast states, between Pennsylvania and Georgia,[12] and as far west as Ohio.[13][14] In June 2017, Lidl opened its first stores in the United States in Virginia Beach, Virginia and other mid-Atlantic cities.[15] The company planned to open a total of one hundred U.S. stores by the summer of 2018.[3][15] In November 2018, Lidl announced plans to acquire 27 Best Market stores in New York and New Jersey.[16] In December 2018, Lidl opened its first location in New York City, in the Staten Island Mall.

Business model
A Lidl store in Greenville,
South Carolina, United States

Like fellow German supermarket Aldi, Lidl has a zero waste,[17] no-frills, "pass-the-savings-to-the-consumer" approach of displaying most products in their original delivery cartons, allowing the customers to take the product directly from the carton. When the carton is empty, it is simply replaced with a full one. Staffing is minimal.[18]

In contrast to Aldi, there are generally more branded products offered. Lidl distributes many low-priced gourmet foods by producing each of them in a single European Union country for its whole worldwide chain, but it also sources many local products from the country where the store is located. Like Aldi, Lidl has special weekly offers, and its stock of non-food items often changes with time. In contrast to Aldi, Lidl advertises extensively in its homeland of Germany.

As with Aldi, Lidl does not play mood music in most countries including homeland Germany, In Lidl stores in the United States, Croatia, Spain (at least not all of them), Poland, Lithuania and two stores in Denmark as a test, they do play music. Lidl stores have PA systems for important announcements but do not broadcast commercials.

The Lidl operation in the United Kingdom took a different approach than in Germany, with a focus on marketing and public relations, and providing employee benefits not required by law, including paying the independently verified living wage and offering a staff discount.[19] Upmarket products were introduced, especially in the lead-up to Christmas. This required significant investment in marketing to produce sales growth but had an effect on Lidl's logistical operation and pressure on profits. Ronny Gottschlich, who ran Lidl UK for the six years to 2016, was responsible for this approach, which led to friction with head office, due to the cost involved. In September 2016, Gottschlich unexpectedly left and was replaced by the Austrian sales and operations director, German-national Christian Härtnagel.[20] Lidl continued to have ambitious investment plans in the United Kingdom, ultimately doubling the number of stores to 1,500. In the financial year of 2015, Lidl Great Britain's revenue from its over 630 stores throughout Britain was £4.7 billion.

Stores
A Lidl store in Zaprešić, Croatia
Interior of a Lidl store at Entrecampos railway station, Lisbon

As of 2020 Lidl was present in 29 countries.

Country Year opened No. of stores Ref.
Austria 1998 230 [21]
Belgium 1995 311
Bulgaria 2010 100 [22]
Croatia 2006 100 [23]
Cyprus 2010 17+1
Czech Republic 2003 220
Denmark 2005 125
Estonia 0[lower-alpha 1] [24]
Finland 2002 188 [25]
France 1989 1,500
Germany 1973 3,301
Greece 1999 232
Hungary 2004 172
Italy 1992 600 [26]
Ireland 2000 162 [27]
Latvia 0[lower-alpha 2] [28]
Lithuania 2016 48 [29]
Luxembourg 2001 10
Malta 2008 8
Netherlands 1997 411
Poland 2002 700 [30]
Portugal 1995 247
Romania 2011 256 [31]
Serbia 2018 41
Slovakia 2004 132
Slovenia 2007 54 [32]
Spain 1994 600 [33]
Sweden 2003 171 [34][35][36]
Switzerland 2009 144 [37]
United Kingdom 1994 761
United States 2017 103 [38]
Total 10,000+

Other services

In October 2009, Lidl Movies was launched in the United Kingdom,[39] undercutting Tesco DVD Rental, which had previously been the United Kingdom's cheapest online rental service for DVDs. The service was powered by OutNow DVD Rental. OutNow went into liquidation in October 2011, taking Lidl Movies with it.[40]

In January 2012, Lidl launched bakeries in their stores across Europe. They consist of a small baking area with a number of ovens, together with an area where bread and pastries, such as croissants, are displayed for sale. The bakeries were initially trialed in a limited number of stores, to determine whether there was a demand for freshly baked products in-store. [41]

In August 2013, Lidl UK also launched an online photo service, which prints photos and photo gifts at discounted prices.[42]

As of May 2019, Lidl US has partnered with Boxed.com to test a home delivery service using the online retailer's technology. Lidl plans to open its first stores in Long Island, N.Y., in early 2020. Lidl also partners with Target Corp. subsidiary Shipt for grocery home delivery.[43]

Lidl also runs Representative Offices in China and Bangladesh, though there is no mention of Lidl stores opening in said countries.

Controversies
A fake Lidl store in Hurghada, Egypt

Food
Opening weekend at Lidl in Vilnius, Lithuania
  • In 2020, Lidl was fined one million euros by the Italian Competition Authority because Lidl had been misleading consumers about the origin of Italiamo and Combino pasta.[44]
  • In 2018, it was reported that Lidl imports raw sausage from Poland into Germany. Pig farmers in Germany have been worried that African swine fever will spread to Germany.[45]
  • In 2017, Lidl was involved in controversy over eggs contaminated with insecticide fipronil.[46]
  • In 2016, poisonous xylene was discovered in a gravy sold by Lidl UK.[47] After being notified of the product error, Lidl waited for more than two weeks before recalling the toxic product.[48]
  • In 2014, a former Lidl UK worker won a case against Lidl after reporting a food safety violation and being bullied from his job.[49]
  • In 2013, Lidl was named as one of the supermarket chains selling products involved in the horse meat scandal.[50]
  • In 2011, minced meat steaks sold under Lidl's private label Steak Country contained E. coli bacteria.[51] 18 persons in France, predominantly children, fell seriously ill from the steaks. Many of the children require lifetime treatment.[52] One child was left profoundly and permanently disabled,[53] and he died years later.[54]
  • In 2010, cheese sold under Lidl's private label Reinhardshof contained listeria. The company failed to prompt a suspension of deliveries in time. One person in Germany died of food poisoning after eating the cheese. Lidl was fined €1.5 million for violating food law.[55][56]
  • In 2008, Lidl was forced to issue an official apology because staff at a Lidl store in Sweden deliberately poisoned homeless people by poisoning food in trash containers.[57]
  • In 2005, Lidl was caught putting additives in meat, which means they are classified as "meat preparations" and allows avoiding salmonella testing and origin labeling, yet marketed the products as "meat", according to the National Food Agency in Sweden.[58]

Working conditions and labor rights
A Lidl store in Santorini, Greece

Stores and warehouses
  • In 2017, a scandal over the heavy workload and intimidation of workers at Lidl broke in France.[59]
  • In 2017, a court ruled against Lidl UK's attempts to suppress trade union representation for its warehouse workers in Bridgend, Wales.[60][61]
  • In 2015, a Lidl warehouse worker committed suicide by hanging himself at his workplace in Rousset, Bouches-du-Rhône, France. According to a labour inspection survey, Lidl had repeatedly harassed the worker with demeaning comments and unreachable orders. The worker had told a relative that he had been doing the work of five employees.[62] An appellate court found that there had been gross negligence on the part of the company.[63]
  • In 2015, it was reported that Lidl had violated labour legislation in Poland such as forcing employees to work for over 13 hours a day, according to reports from the state labour inspectorate. A chairman in the Solidarity trade union in Poland said that Lidl managers harass and intimidate employees who want to organize.[64]
  • In 2014, Lidl UK staff were instructed not to speak any language other than English, not even Welsh (an official language used in Wales), with Lidl's customers. The Welsh Language Society (Cymdeithas yr Iaith) said the policy was "appalling". Cymdeithas yr Iaith's chairman, Jamie Bevan, said that "since the Welsh language bill was passed four years ago, it is illegal to stop staff from speaking to customers in Welsh".[65]
  • In 2009, it was reported that approximately 300 sheets of paper containing Lidl employees' personal information had been found in the trash bin of a car wash in Bochum, North Rhine-Westphalia, Germany. Among the sheets were forms filled with details of the employees' sick days and illnesses. This included reproductive health; for example, a female employee had the annotation: "Wishes to become pregnant, fertilisation has been unsuccessful".[66]
  • In 2008, The Times[67] noted that Lidl managers worked overtime hours and were directed to sign out of the Working Time Directive when starting with the company.
  • In 2008, German newspaper Stern uncovered Lidl spying on its staff, including registration of employees' toilet visits as well as personal details regarding employees' love lives, personal finances and menstrual cycles.[68] In September of the same year it was fined €1.5 million for the unauthorised surveillance of its employees in Baden-Württemberg, Germany.[69]
  • In 2008, it was reported that Lidl's Czech branches had allowed female employees who were menstruating to use lavatories on condition that they wore conspicuous headbands during their periods.[70]
  • In 2006, the German United Services Trade Union published an updated edition of The Black Book on Lidl in Europe. The book is based on accounts from past and present employees. It contains many wide-ranging criticisms against the grocery chain. For instance, an anti-pregnancy policy in Portuguese branches is mentioned.[71]
  • In 2004, Lidl was awarded the Big Brother Award in Germany for acting almost like a slave master towards its employees.[72]
  • In 2003, a judge in Savona, Liguria, Italy, sentenced Lidl for opposition to union policies, a crime in Italy.[73]

Suppliers
  • In 2018, striking workers were assaulted and injured by a "mob of 'hired thugs'" at one of Lidl's suppliers, Fu Yuen Garment Co Ltd in Myanmar. 28 workers were wounded, six of them seriously. The workers had been picketing the factory because of poor conditions and mistreatment.[74]
  • In 2017, it was reported that some of Lidl's prominent vegetable suppliers in Germany had been paying workers significantly less than the minimum wage.[75]
  • In 2016, Oxfam in Germany revealed the following about the working conditions on certain fruit plantations that supply Lidl: Workers have to work there simultaneously when pesticides are dropped on the plantation. Workers have said that they suffer from frequent illnesses and miscarriages. Work contracts are oral and for three months only. Many workers do not want to form labour unions in fear of retaliation.[76]
  • In 2010, the Consumer Protection Agency in Hamburg, Germany, filed an unfair competition complaint against Lidl. The company had deceived customers by giving the false impression that the working conditions at Lidl suppliers were good. In reality, the conditions were reported "inhumane" and in breach of conventions and standards.[77]
  • In 2008, a company named Weinzheimer was exclusively baking all in-store bakery products being sold by Lidl in Europe. A Die Zeit journalist worked at the bakery and reported bad working conditions. Overwork and inadequate equipment had led to workers suffering concussions, wounds, and burns. "You [workers] are cheaper than new [baking] sheets", a manager told the undercover reporter.[78]

Other
  • In 2020, Lidl lost an intellectual property lawsuit. Lidl had copied a maker of plant milk without permission. The discount chain is required to indemnify Chufamix's Valencian inventor.[79]
  • In 2017, Lidl was involved in controversy related to removing crosses on pictures of churches. Its branch in Camporosso, Italy, was using a picture of the church of Dolceacqua, Italy, for promotional purposes with the cross removed from the picture of the church.[80] Lidl had removed crosses from pictures of churches on the Greek island Santorini used on packaging for its Eridanous line of products. Lidl acknowledged it made a mistake and promised to deal with the issue.[81][82][83]
  • In 2017, all of Lithuania's major newspapers reported that Lidl Lithuania, compared to other Lidl markets, sets higher prices on identical products despite lower expenses including rent, salaries, etc.[84][85][86][87]
  • In 2017, Italian police arrested 15 people from four of Lidl's offices during investigation into ties with Laudani crime family.[88]
  • In 2013, it was reported that in Germany Lidl had failed to notify health officials of numerous rat infestations. Instead, Lidl spread powdered rat poison on the product shelves, without informing customers of the rodenticide. One of Berlin's chief health inspectors warned that children who come in contact with rat poison may bleed to death.[89][90]

Notes
  1. In construction, 9 stores planned to open by 2020.
  2. In construction, 10 stores planned to open by 2020.
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