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Lidl SWOT Analysis

Dartford and Gravesend Stores

Alessandro Ferrazza

25/11/2019

Strengths

STRENGTHS

  • Limited general merchandise product range and own brand labels.
  • Efficient operations strategies.
  • Investment in their employees.

Product Range and Private Labels

Product Range

  • Low prices without compromising quality.
  • 90% of products are own brand labels.
  • The success of the Deluxe range.
  • Catering for dietary requirements.

EFFICIENT OPERATIONS

STRATEGY

Operations

  • Efficiency measures in store design.
  • Cross-training staff to increase productivity.
  • Investment in technology e.g. self-service checkout systems.

Investing in Employees

Employees

  • Investing into training and development.
  • Higher Living Wage.

Weaknesses

  • Limited product range and brands.
  • Lack of continuity of product availability
  • Efficient nature of customer service.

WEAKNESSES

Limited Product Range and Brands

PRODUCT RANGE

  • Competitors have a large range of departments and services in store.
  • Appeals to 'One-Stop-Shop' customers.
  • Confusing customer journey - bakery - chilled - clothing & electrical - ambient - Frozen - chilled - ambient - toys.

EFFICIENT CUSTOMER SERVICE

CUSTOMER SERVICE

  • Limited number of staff available on the shop-floor for customer queries.
  • Uncomfortable shopping experience for customers that may need more help than others.
  • Long queues due to a small number of checkouts open at pick times.
  • Messy display and product merchandisers

Opportunities

OPPORTUNITIES

  • Increasing disposable income, increasing consumer spending.
  • Attracting customers form competition.
  • Loyalty scheme.
  • Expansion of Lidl's online platform.

INCREASED CONSUMER SPENDING

CONSUMER SPENDING

  • Steady growth in the UK average household disposable income.
  • Unemployment rates as low as 3.8%.
  • More indulgent and impulsive spending.

LIDL'S ONLINE PLATFORM

ONLINE PLATFORM

  • Rising dominance of online grocery shopping in the UK.
  • Grocery delivery and/or collection service.
  • Competitive advantage over current and emerging discount retailers. (only big 4 offer local delivery)

THREATS

  • Increasing competition amongst discount retailers in the UK.
  • The uncertain political climate of the UK post referendum and delay of Brexit.
  • possible shortage of fresh produce from EU

INCREASING COMPETITION FOR DISCOUNT RETAILERS

INCREASING COMPETITION

  • 'Jacks' stores opening in the UK, owned by Tesco which started from the north UK.
  • ASDA (Gravesend) open 24/7
  • Amazon Fresh entering the online grocery delivery service market in the UK.
  • Announced re-launch of M&S food to order/delivery

UNCERTAIN POLITICAL CLIMATE OF THE UK

BREXIT CONSEQUENCES

  • Longer transportation process across the border would not be ideal for 'just-in-time' delivery mechanism.
  • Compromising quality of perishable goods.
  • Lesser choice and availability of goods all year round.
  • Higher costs of importing from Europe could cause inevitable price increases affecting both stores.
  • Brexit effect on employment trends.
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