PRICER.LT INVESTIGATION: WHY LIDL WILL DEFEAT RIMI IN LATVIA?
Lidl opening date is coming closer in Latvia and no doubt local retailers are trying to prepare. Before Lidl opening in Lithuania all local retailers from the first chart positions were explaining that Lidl will affect retailers from lower positions, who are working with small income consumers, that local customer values quality, local producers and products.
All those fantasies came to the end when after opening Lidl started to break a neck of retailers from top positions. And even Rimi Baltic reports are showing this situation:
We will not do deep operational investigation of retailers – costs of rent, employees effectiveness. We will simply compare what promotional offers Rimi Latvija and Lidl have. So, let’s start.
Comparison of Rimi Latvija ir Lidl Lietuva weekly leaflets.
Rimi weekly offer has 14 pages – 12 Rimi ir 2 Rimi hypermarket. Lidl weekly leaflet – 56 pages. There is no question who is winner here. Sure, Lidl has 20 pages of nonfood offers, but because for this moment is prohibited to sell nonfood items in Latvian offline stores, we will omit those categories.
We will take a look to the main traffic building categories.
Fruits and vegetables
Few offers for Week of the Mediterranean tastes.
Rimi hypermarket offer (all customers because of “huge” price difference are running to Rimi hypermerkets)
Rimi – 8 items in fruits and vegetables.
And some carrots for the weekend.
Lidl – 15 items.
Prices – something cheaper, something more expensive – anyway Lidl in Latvia will put prices according market – we are more will pay attention to amout of offers or items.
Fresh meat and poultry:
Rimi – 5 meat and poultry offers.
Bread and bakery:
And bun for a weekend
Lidl – 12 offers.
Milk products and cheese offers:
Additional hypermarket item
Rimi - 13 offers.
Lidl - 18 offers.
Sausages and meat delicatessen:
Additional hypermarket item
Rimi - 11 offers.
10 items. Well, a little bit less than Rimi, but there is Tastes of the World by both retail chains where we can find those products.
Tastes of the World
Rimi – Mediterranean tastes
Lidl – Tastes of France
32 offers. By 1 less than Rimi, but better category coverage and more interesting products.
Lidl also have permanent offers from small local producers – we think that in Latvia will be the same – Lidl had enough time to negotiate.
Also Lidl pays permanent attention to childrens
And for specialized diets
When You look at such offers in general, like ordinary consumer it becomes not clear which one Rimi or Lidl is supermarket and hypermarket chain. Having in mind, that Lidl will open tens of stores, will dominate in media, it becomes clear, that Rimi Baltic management is completely unprepared to Lidl entrance, especially knowing that this was their one of the main tasks.
In 2020 Rimi Baltic was losing sales.
2021 will be even harder. Now share of sales of Rimi Baltic is 12,6% in ICA group turnover and 13,7 % in group profit – what is good and shareholders do not have big. But we see, that it is not big business inside ICA group.
With such “preparation” of Rimi in Latvia before Lidl entrance – company will give 2-3 percentage points of market share to newcomer. The expenses of Rimi will stay the same and profitability will fall down dramatically and for sure shareholders will not like it and they will start to think do they need problematic business in such small Baltic market.
We guess, that we are thinking too much forward, but Rimi supermarkets can be easily converted to Lidl and Rimi hypermarkets to Kaufland.
BE WORTH OF FREE CHOICE ALWAYS!
Head of food direction at Pricer.lt
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