Is Lidl’s employee culture the biggest threat to other grocery stores?

Dive Brief:

  • The retail industry has been aware of German grocery chain Lidl’s U.S. expansion plans for a while, but its accelerated timeline may be catching American retailers by surprise, according to Chain Store Age. The grocery chain’s first 20 stores will open this summer in Virginia, North Carolina and South Carolina, and plans to get 100 stores up and running within the year.
  • Many grocery retailers are already taking active steps to compete with Lidl by adjusting price strategies, reducing operational costs and offering special promotions and discounts to differentiate their brand.
  • The newcomer has scored big in Europe with a popular private label assortment – pitched as being better than national brands – and limiting overall product assortment.

Dive Insight:

There are many reasons that retailers are nervous about Lidl. Its prices, its products, its locations and its store layouts make it a formidable competitor. But those might not be the biggest threat to other grocery retailers.

Never mind store designs, or prices, or any of the other issues potential competitors have been concerned about: While those issues are all important, so are the ways employees are treated.

Grocery employee turnover is extremely high and pay tends to be low. Retaining employees helps to build a cohesive team and a solid shopping experience.

In order to attract and retain the best talent, Lidl US offers one of the most generous benefits and compensation packages in the industry. The program is designed to ensure that Lidl US employees “are recognized and rewarded for their talents, feel valued for their contributions and are motivated to continue to grow their careers with us.”

The company’s website spells out in more detail what retailers are going to be competing with when Lidl comes to town: Medical, dental and vision insurance with flexible spending accounts, a 401(k) and retirement plan with employer contribution, life insurance, disability insurance, an employee assistance program, paid time off, time off for volunteering, commuter benefits and company sponsored social and fitness events.

Lidl announced last week that it will begin hiring for stores in Fredericksburg and Culpeper VA, according to A company press release said some 800 employees will be hired for stores in Virginia localities including Fredericksburg, Culpeper, Bon Air, Chesapeake, Chester, Hampton, Henrico, Newport News, Norfolk, Richmond and Virginia Beach. Store associates will receive starting salaries of $12 per hour, plus benefits, the release said.


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