SPOTLIGHT ON BELGIUM: Lidl’s Formula for Growth

SPOTLIGHT ON BELGIUM: Lidl’s Formula for Growth

To state that Belgian shoppers are price-savvy is a bit of an understatement. According to Nielsen’s Shopper Trends Report, 59% of Belgians are “price/promo-obsessed” — significantly higher than the global average of 53%.

And Belgium’s price-conscious culture continues to fuel the growing importance of discounters. The cumulative value share of Aldi and Lidl, along with soft discounters in Belgium, amounts to over 40% of the market — with volume sales higher than 55%. These stores have gained an average share of almost +1% per year during the last ten years — proving that the Belgian consumer, more than ever, is looking for value for money. 

In 2015, Lidl celebrated its 20th anniversary in Belgium and the Netherlands, with approximately 300 stores in Belgium (6% share) and 400 stores in the Netherlands (10% share). Their growth strategy focuses on modern, small format, proximity stores offering value for money, while constantly communicating about their quality.

And it’s not just about private label products anymore. Top brands represent about a quarter of Lidl’s sales in Belgium, making us rethink the accuracy of Lidl’s traditional hard discounter label. In 2008, listing more than 100 top brands at Lidl resulted in a +1.5% share gain for the company — thanks to extra traffic to the store and the resulting additional sales on their private label products.

Lidl’s benefit of stocking brands in their stores is clear, but what are the pros and cons for manufacturers? Is it worth the risk for manufacturers to list their brands at Lidl, knowing that the availability of their product at Lidl will make Lidl’s brand stronger? And potentially cause price erosion for the brand?


·         A lot of on top sales. For impulse categories (like chocolate, for example), more than 90% of sales are additional!

·         Category uplift for non-extendable categories (categories with similar turnover year-after-year) is often more limited, but on the brand level it almost always results in a lot of additional sales, resulting in share gain.

·         21 out of the top 30 brands are listed at Lidl. If a manufacturer decides not to list at Lidl, it is very likely that his/her competitor will, which could result in overall share loss. This may also create some price erosion for the competitor, creating a higher price gap with the manufacturer’s brand and the rest of the market.

·         Lidl’s positioning as a modern proximity store offering value for money products attracts an increasing number of consumers: over 30% of Belgian shoppers visit Lidl at least once a month. It is even the preferred store of more than 10% of the Belgian consumers.* Not listing at Lidl means potentially missing a significant group of potential customers.

·         Jump on the fast train: Lidl is still gaining importance, so listing at Lidl could result in automatic sales increase. Lidl remains extremely ambitious:

o   Biggest retail advertiser** a couple of years in a row, despite only reaching 6% market share in Belgium.

o   Strongest retailer performer on social media and sponsor of major events and teams (ex. Tomorrowland and one of the biggest cycling teams)

o   Intention to open 50 new stores in Belgium the next 5 years.

·         Higher visibility. An average Lidl store has only 2,000 items, so if a manufacturer’s brand is listed, it will be noticed faster than in an average store.

·         Consumer perception of a good deal. A lot of consumers mentally associate Lidl with low prices, so it’s not unlikely that consumers will buy the manufacturer’s brand without knowing the price in other stores. They might think they made a good deal — just based on store perception.


Biggest risk is without any doubt price erosion — observed in many cases. This concern is even stronger in Belgium due to Colruyt’s continuous price tracking/fitting. A solution to avoid this could be listing a different variety of products.

The manufacturer’s relationship with other retailers could become strained, but as Lidl already lists so many brands, this risk is getting weaker. Alternatively, manufacturers could consider reinforcing their relationship with retailers to give them an upper-hand on Lidl’s assortment.

In general, manufacturers may see smaller profit margins and hard margin discussions, particularly in year two. This point complicates the situation, as it‘s also not easy to say no to the additional sales.


While price erosion is a major concern, it is inevitable in the coming years as the retailer landscape gets increasingly competitive. If price erosion isn’t a show stopper and margins are fair, the answer on whether to list or not appears clear: manufacturers can’t afford not to.