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Introduction

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by

John Barlow

on 25 January 2017

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Transcript of Introduction

Introduction

In light of increased market activity in the U.K and IRL by Lidl which has culminated in the launch of their ‘Store of the Future’ concept in the U.K in November 2015, a decision was made at the May 2016 MDM to resource an in depth investigation into Lidl’s current practices in order to:
“Deliver strategic insight to our business leaders, to help inform future decision making”

The investigation commenced in June 2016 with the goal of delivering broad and in depth research assimilated to a key findings presentation to the business in September 2016. Resource requirements included; x1 Director (full time), x1 Corporate manager (part time) x1 Logistics assistant (full time) and a number of subcontracted 3rd parties where it was decided specific expertise was required.

As part of the data capturing phase the team:
• Carried out extensive paper based & web based research
• Interviewed a number of current and former Lidl employees
• Carried out extensive store visits, measuring every fixture and purchasing every product both in Lidl and in Aldi in the U.K and in key European markets such as Ireland, France & Spain
• Managed 3rd party suppliers of key outsourced tasks such as availability/price change analysis
• Sought expert assistance from senior Aldi employees in regards to core functions such as Buying
Having completed the data capture in August, the team then filtered and collated findings by 9 key business functions:
1. Personnel
2. Property
3. Buying
4. Merchandising
5. Future Store
6. Store Operations
7. Key Events
8. Logistics
9. Services
By achieving this a master file could be created whereby all relevant information could be stored and made accessible for interested parties to locate. In addition to a number of hard copies, electronic versions have been made available. From this file 6 key activities were identified from which it was considered Aldi required the most urgent attention, the summaries of each are detailed within this document.
Findings

In order to assist with the decision making process for each of the key findings, master sheets have been created (see appendix 1) which summarise the points raised and leave room for a committee to add any actions to follow having reviewed the evidence provided. It is recommended that each of the committees concerned review the documentation and use as a discussion point at the next available committee meeting.
Introduction
Section 1: Property
Summary
1.1 Lidl have developed a differing property strategy to Aldi, which over the last two years has seen their acquisitions directly affect Aldi’s ability to purchase preferred sites. The current Lidl strategy can be summarised as follows:

Significant change to the standard Lidl store design
Site size up to 2.5 acres
Store footprint up to 28,000 sq ft, (2,600 sqm)
Car-park increase to 100 spaces
Significant internal retailing changes (including in store bakery)

• Review of existing estate in order to modernise the retail offer in each location
Procedure is to close store for up to 5 months for extensive refurbishment in order
to bring up to new ‘store of the future’ concept standards

• Significant increase in the value Lidl are prepared to pay for site acquisitions
Potentially offset via the sale of residential properties constructed simultaneously to
store builds (see Fig. 1 below)

• Property viewed as an asset rather than a liability on the balance sheet which
therefore appreciates rather than depreciating. This could influence decisions
on purchasing within premium urban areas

Section 1: Property
Summary
1.1 Lidl have developed a differing property strategy to Aldi, which over the last two years has seen their acquisitions directly affect Aldi’s ability to purchase preferred sites. The current Lidl strategy can be summarised as follows:

Significant change to the standard Lidl store design
Site size up to 2.5 acres
Store footprint up to 28,000 sq ft, (2,600 sqm)
Car-park increase to 100 spaces
Significant internal retailing changes (including in store bakery)

• Review of existing estate in order to modernise the retail offer in each location
Procedure is to close store for up to 5 months for extensive refurbishment in order
to bring up to new ‘store of the future’ concept standards

• Significant increase in the value Lidl are prepared to pay for site acquisitions
Potentially offset via the sale of residential properties constructed simultaneously to
store builds (see Fig. 1 below)

• Property viewed as an asset rather than a liability on the balance sheet which
therefore appreciates rather than depreciating. This could influence decisions
on purchasing within premium urban areas

John

at

Skillsloft
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