Lidl is opening 15 stores in nine towns across Lithuania on Thursday and buyers are expected to come in scores to check them out.
Marketing specialist Linas Šimonis says Lidl has two aces up its sleeve that give the German retailer an edge over other players in the market: low prices and different brands from the usual offering at Lithuania’s supermarkets.
“The Norfa chain has a strategy of ‘cheap’, Maxima’s slogan is ‘big network and discounts’; Iki seeks to be your small corner shop, while Rimi had not had a strategy for a long time, but is now positioning itself as a higher-quality supermarket chain, although not entirely successfully,” Šimonis summarizes the situation in Lithuania’s retail market.
“A new competitor might force established supermarkets to adjust their strategies. Norfa and Rimi are facing the biggest challenge, since Lidl will be offering cheap and slightly different products from what’s on offer in other supermarkets.”
However, older chains are more likely to take up short-term tactical steps than change their long-term strategy, he believes.
“Short-term tactical steps are likely, but for a week or two Lidl stores will be full of buyers, since people are curious to see what the newcomer is offering. No special offers can outbid this natural human curiosity,” Šimonis believes.
As to the common-sense notion that there is necessarily a trade-off between price and quality, he says it is too early to tell whether the offering at Lidl will fall short of those in other supermarket chains.
“It is a chain that can offer lower prices because it has a huge purchasing power exceeding anything that a Lithuanian chain can muster. Moreover, let’s not forget it is a big German network and Germans are demanding customers. As are Lithuanians, as a matter of fact, they also expect high quality from their supermarkets,” Šimonis says.