Speculation has emerged around whether Lidl is planning to launch an online delivery service after it created a holding company called Lidl Digital Logistics in Britain.
There are reports that the discount German retailer was gearing up to enter the online grocery market as it looks to compete with the likes of Tesco and Sainsbury’s, both of which have established strong e-commerce operations.
Lidl Digital Logistics was incorporated with Companies House on 25 April, with initial shareholdings of £50,000. The retailer’s chief financial officer Dirk Kahl and chief executive Chritsian Hartnagel were registered as directors for the new business.
The move may have been prompted by news of a potential £15 billion merger between Sainsbury’s and Asda to create the UK’s biggest supermarket.
Both Aldi and Lidl reacted bullishly to Sainsbury’s pledge to slash everyday prices by 10% if the merger goes ahead by vowing to remain cheaper than their competitors.
According to a 2015 survey by industry body IGD, a third of shoppers would consider buying fresh and chilled food online from the discounters.
The same study found that 78% of consumers who already shop at Lidl and Aldi and shop online with other retailers would be willing to order online from the discounters.
However, up until now the German supermarket chains have been reluctant to venture into e-commerce because it wouldn’t fit with their low-cost, no-frills business model.
“Once you factored in the cost of picking, packing and delivering, there’s no way Lidl could have offered the same low prices you find in store,” retail analyst Natalie Berg from NBK Retail said. “However, the rise in third-party delivery services is opening doors for supermarkets, allowing them to cater to the growing demand for online grocery without the hefty investment in infrastructure or systems.”
RPA Perspective Aldi’s German rival Aldi also has a delivery service where customers can buy wine and general merchandise such as clothing, children’s toys and DIY tools. Shoppers still have to go in store for fresh food, and its online offering is limited.
Although Lidl has 700 stores in the UK and pulled in revenues of £6.1billion last year, this is the first time it has expressed an interest in moving online.
The company filing comes as Sainsbury’s and Asda prepare to join forces to create a £14.1billion supermarket.
The competition regulator has begun its investigation into the merged company which would have 2,800 stores with combined revenues of £51billion. The grocery powerhouse is likely to be viewed as a major threat to rivals as it becomes the UK’s biggest supermarket.
Sainsbury’s and Asda have vowed to slash prices if the merger goes ahead. Aldi and Lidl have already hit back and vowed to remain the cheapest option for shoppers.