They haven't overwhelmed the U.S. grocery marketing quite as quickly as they hoped they would over the last couple of years, but German deep discounters Aldi and Lidl are still in position to disrupt traditional retailers.
A new report from Boston-based global management consultancy Bain & Company says now isn't the time for incumbents to become complacent.
While it may be true that Aldi and Lidl haven't ascended as rapidly as first expected, both retailers continue to make slow and steady gains.
Aldi, which is currently in the process of remodeling every location in its U.S. portfolio, continues to win over shoppers. The report notes that Aldi's consumer advocacy rose to 55% in 2018, up from 46% in 2017.
Lidl captured 3% or more share in five of the seven markets in the report's study during the summer of 2018, gaining spending from traditional grocers.
“Lidl and Aldi are just beginning to flex their competitive muscles,” says Mikey Vu, a partner with Bain & Company’s retail practice and a co-author of the report. “What we’re seeing is that U.S. grocers can effectively stand up to these hard discounters, but that they need to remain vigilant and innovate in strategic areas to keep their edge.”