Own-Brand Grocery Stores Are A Hit With Shoppers, Suppliers

There was a time when products sold at so-called limited assortment, or own-brand discount, grocery stores were considered a bit cheesy by Britons (and Americans). But that perception has changed, thanks to the success of German companies Aldi and Schwarz, owner of Lidl, which together accounted for €120 billion ($162 billion) in sales in 2013. The two companies have 20,000 stores in Europe, the U.S. and Australia. Their strategy of offering a limited selection of products – 3,000 compared to 50,000 in a hypermarket – at deeply discounted prices has struck a chord with economy-minded grocery shoppers. Suppliers, too, are happy with the bulk discount structure because it is simple, efficient and profitable. Will economic recovery send shoppers back to traditional supermarkets? A Lidl exec doesn’t think so. “Those BMWs and those Porsches and Jaguars parking in our car parks, we won’t let go.”