Lidl eyes €90 mln in sales, aims for double-digit market share
Low-cost retailer Lidl is opening its first seven stores in Cyprus on Thursday and spent more than 1.2 mln euros in print and broadcast advertising in October alone in a bid to grab as big a chunk as possible of supermarket sales.
Although the Greek-managed subsidiary of the German giant Schwarz never discloses its future plans, market observers say that Lidl will open at least two more stores in the coming months, one in Paphos and one in Ormidheia. Furthermore, it aims to achieve a double digit share of the retail sector as plans also include attaining a turnover of 90 mln euros by the end of 2011.
This aggressive marketing approach prompted Christakis Orphanides to declare last month that he plans to open another 11 Orphanides Express stores throughout the island offering “the lowest prices” in the market, challenging Lidl’s worldwide reputation of “quality buys at smart prices”, ie. the lowest in the market.
Lidl also claims to be helping the local economy by employing 450 people with a starting salary of 1,100 euros a month, which Orphanides countered by saying he already employs 1,500 people and will add another 650 jobs with the new chain of outlets that will supplement the Group’s 12 supermarkets and two shopping centres.
Inaugurating a new store in the capital’s Sopaz area last month, the chairman of the CSE-listed company also challenged a nearby rival, Athienitis, saying he would offer the cheapest prices in the market. To the benefit of consumers, Athienitis, Orhpanides and Lidl are within a stone’s throw of each other in Pallouriotissa, allowing shoppers to compare goods and prices.
However, Orphanides also criticised the store-keepers’ association, Povek, calling them “lazy” for objecting to supermarkets opening on Sunday, an issue that has been a great concern to the Carrefour chain on the island as well.
In keeping up with competition, the supermarket chains have boosted their fresh fruit and vegetable stalls, and added butchers and bakers to keep their clientele.
Special offers and cut-price deal will probably be on the rise leading up to Christmas with the chains spending hundreds of thousands of euros on new leaflets each week and taking much of the prime-time slots on radio and television.
Already, according to data compiled by the MatrixMedia monitoring service, Lidl Cyprus has so far spent EUR 45,045 on print advertising in October and EUR 974,152 in air time on TV. Orphanides spent EUR 41,021 and EUR 817,446, respectively, while Carrefour has placed half of that budget last month, with EUR 1,650 in print advertising and EUR 548,314 on TV.
Alpha Mega spent a total of EUR 300,000 in print, radio and TV advertising, while Debenhams’ Food Dept dished out EUR 164,000 last month.
Total ad spend for all supermarkets in print, radio, TV and billboards is estimated at over EUR 4 mln for the month.
Lidl Cyprus will operate three stores in Nicosia (Lakatamia, Pallouriotissa, Kokkinotrimithia), one in Limassol, one each in Larnaca and Aradippou and one more in Paralimni. Most of the products on shelves will be own-label goods, as is the case in all 25 countries where Lidl has a presence, making it the fifth largest chain in the world.
