Lidl US CEO Lifts Lid on Winning Strategy of Limited Assortment
“The store is the stage, and the product is the star.”
That declaration from Lidl US CEO Joel Rampoldt at Progressive Grocer’s recent Grocery Impact event in Orlando, Fla., is one summation of the company’s philosophy of food retailing. In that analogy, it’s also less about a cast of characters than standout performers.
Rampoldt emphasized Lidl’s limited assortment, comprised of highly vetted items that resonate with shoppers. “Our proposition is very simple: you get the best quality and you get the lowest price and you don’t’ have to compromise between those two,” he declared. “I get challenged on this all the time – how can you possibly be both? We think that we can actually deliver on that. Part of that is that we are a highly vertically integrated company and will always be a private brand-forward company. The other part is simplicity.”
To that end, Lidl stores carry fewer SKUs, but ones that have been deemed high quality, whether it’s the $0.49 croissants made with dough from France or produce that’s fresher due to the logistics of more local pickups. In another example, Rampoldt shared how he and his team also worked to elevate the quality of the fresh beef available in the store by working with suppliers and updating the packaging and store brand, Butcher’s Specialty.
As a result of its efforts, Lidl continues to grow its private brand share, Rampoldt noted. “We’re growing that business by growing our private brands faster than the market. What I’m most excited about is how we’re doing it. We are taking every opportunity to lower prices and then drive more units,” he said, citing progress in becoming more efficient across its operation in stores, trucking, distribution centers and other aspects of the business.
The chain’s limited assortment is mirrored by limited promotions. “What we find is when you promote heavily, you slam volume into and out of the items that are going on and off and then you have massive cannibalization that causes issues with availability,” the CEO explained.
While promotions may be simplified, the retailer does have to zero in on messaging the store identify as it continues to expand its footprint across the United States. “A lot of people don’t know we’re a food market – they think it sounds like a Scandinavian furniture store. So, we have to remind them that yes, we are a food market,” Rampoldt said with a smile, explaining the company’s recently launched marketing campaign with the tagline, “The Super-est Market.”
Looking to the future, Rampoldt said Lidl is well positioned in a competitive grocery arena. “Given our scale, we will never be the biggest marketer in the U.S., but we can be the most talked about.”
