Mainstream supermarkets — the ones that have been losing share to so many other channels for years — are the talk of the summer this year with names like Lidl and Amazon roiling the market. Both the German supermarket chain and Amazon with its on-line prowess are seen as potential game-changers in the supermarket industry. And both are taking aggressive but different approaches that provide potentially big opportunities — and maybe some challenges for bakers and snack producers.
Amazon, with its bid to buy Whole Foods, could redefine on-line shopping that remains a small part of overall supermarket sales. On-line shopping really doesn’t excite every baking and snack manufacturer because a huge portion of sales is impulse-driven, but the innovative thinkers at Amazon could redefine the shopping experience with a new blend of on-line delivery options that genuinely melds with a premium brick-and-mortar shopping experience.
Lidl, however, is making a value play that challenges mainstream grocery chains, mass merchandisers and even discount stores with its small-format stores and lowest possible price model. Lidl has a vast wealth of experience in international markets, operating more than 10,000 grocery stores in nearly 30 countries.
The questions remain: How will the Krogers, Safeways and Albertsons of the world respond? Will they simply match prices on Lidl’s value side and copy the bold thinking from Amazon? Or will they sit on their hands until it’s a “Lidl too late”?
