Tesco, Asda, Morrisons, and Sainsbury’s have dominated the retail space for years, but they are beginning to face new challenges as we see a huge shift in consumer shopping habits. A recent surge in the volume of shoppers switching their weekly shop from supermarket giants, to bargain discount stores, means big trouble for our big chains, but big profits for two German upstarts.
Aldi and Lidl have been around in the UK since the early 1990s, but when the recession hit, these two popular discounters saw a boom in business with the British public. Now post-recession and consumers are still after a bargain.
As they climb up the ladder of success and popularity, will Aldi and Lidl start to build a stronger corporate story to stop them from crashing down when things get tough in the media spotlight? Despite having reasonably strong brand stories with successful advertising campaigns, good value for money and bargain prices, both Aldi and Lidl have had their fair share of damaging headlines.
When a Lidl employee was bullied out of his job for blowing the whistle on potentially compromised food quality, Lidl was taken to court, and its reputation for selling quality food took a detrimental hit.
After a power cut one warm afternoon, Matthew O’Donnell raised the alarm in one Bristol store as food was left defrosting and warm for more than four hours. This kick-started a campaign of harassment and bullying against the former employee, who had his job threatened if he were to blow the lid. Soon after, he quit.
The case was taken to the tribunal courts which won O’Donnell more than £10,000 in damages.
When Icelandic The Saucy Fish Co took on Aldi’s Saucy Fish, Aldi was branded a ‘copy-cat’. Similar packaging, with a similar name, for a similar product - Aldi had nowhere to hide from the headlines.
They reached an out-of-court settlement, but with both of these stories, the damage had already been done for Aldi and Lidl.
With a combined market share of 8% and with the sun slowly setting on the supermarket giants, now is the time for the German discounters. They both need to communicate a consistent corporate story to support them, because as Tesco has proved, the headlines can turn one reputable business into a fallen one.
In the latest addition to the One Story series, PRWeek in partnership with Electric Airwaves, explore what Aldi and Lidl need to do to engage their customers through an emotional and rational corporate story.