---
title: "Beyond ALDI: How Lidl Became the World's Largest Hard Discount Chain"
description: "At the 2025 China Supermarket Week, Jiang Shijia, head of Lianshang.com's overseas center, shared insights on Lidl's success as the world's largest hard discount retailer. Lidl's model focuses on high quality at low prices, efficient operations, and a strong private label strategy, offering lessons for Chinese retailers."
author: "联商网编辑部"
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published: "2025-04-13"
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# Beyond ALDI: How Lidl Became the World's Largest Hard Discount Chain

> At the 2025 China Supermarket Week, Jiang Shijia, head of Lianshang.com's overseas center, shared insights on Lidl's success as the world's largest hard discount retailer. Lidl's model focuses on high quality at low prices, efficient operations, and a strong private label strategy, offering lessons for Chinese retailers.

**Source** | Lianshang.com **ID** | lingshouzixun Author | Song Bai
From March 25 to 28, the 2025 China Supermarket Week, hosted by Lianshang.com, was held grandly in Xuchang, Henan. As one of the largest and most professional annual events in China's supermarket industry, this year's conference continued with the theme "The Road to Beauty," jointly exploring a new chapter in industry development.
At the sub-forum "China Discount Store Development Forum" on March 25, Jiang Shijia, head of Lianshang.com's overseas center, delivered a wonderful presentation titled "Lidl: The World's No.1 Hard Discount Chain." Jiang Shijia stated that Lidl's success reflects the purest good intention of the retail industry: enabling every ordinary consumer to enjoy a quality life. Truly great businesses do not create profits through high prices but bring tangible improvements in quality of life to the masses. This business philosophy of making beauty accessible is the core value we aim to explore.
**The following is the full text of Jiang Shijia's speech (edited by Lianshang.com):** Before diving into the topic, I would like to share the story and vision behind this exchange session. Around 2020, Mr. Pang Xiaowei, chairman of Lianshang.com, initiated a forward-looking research initiative on "Overseas Beautiful Business." This initiative aims to uncover truly outstanding retail enterprises globally. They have experienced different retail cycles and market changes, yet still achieve steady, healthy, and sustainable development. We hope to convey a new paradigm of sustainable business development to the retail industry through in-depth analysis of the business philosophy and humanistic values behind these enterprises. This is not only a long-term research plan but also a persistent pursuit of high-quality development in retail. We believe that the power of persistence will eventually allow these valuable business wisdoms to take root and flourish in broader soil. This year, we return to the hard discount field, focusing on Lidl, for two important reasons: on one hand, Lidl, as the only hard discount model innovator recognized by former ALDI executives, has achieved new breakthroughs in sales, global store count, and sales per square meter in recent years; on the other hand, as China's retail industry accelerates its transformation toward smaller formats, discounting, and fresh food, Lidl's successful practices in European and American markets provide valuable inspiration and reference for domestic enterprises. Next, I will share Lidl's latest story from three dimensions: first, an introduction to Lidl's corporate profile and founder's values; second, an analysis of the underlying logic of Lidl's hard discount business model; third, sharing observations and thoughts from our field visits in Europe.
**As a latecomer surpassing ALDI** According to the 2024 Global Retail Rankings released by the National Retail Federation (NRF), Lidl's parent company, the Schwarz Group, firmly ranks fourth, while ALDI, also a discount supermarket representative, ranks sixth. As a latecomer, Lidl has not only surpassed the originator of the hard discount format in overall sales scale but also increasingly leads in global store network coverage and per-store operational efficiency. Meanwhile, according to a survey by the EHI Retail Institute in Germany, this mature retail system, developed over a century, is showing two distinct trends: on one hand, traditional hypermarkets, despite continuous renovation and upgrades to adapt to new consumer demands, still see a structural decline in market share; on the other hand, small-scale specialized retail formats dominated by hard discount stores and drugstores not only maintain a dominant market position but also sustain steady annual growth rates.
Specifically regarding Lidl, we must mention its soul figure, founder Dieter Schwarz. He is extremely low-key and frugal, with no more than five public photos available to this day. Dieter's business philosophy is deeply rooted in the influence of his father Josef and his upbringing. In the 1930s, when his father opened a fruit wholesale store in a small German town, it was on the eve of World War II. Local residents relied on limited ration coupons to survive. Josef repeatedly negotiated with wholesalers to push prices to the lowest possible level, making goods affordable for ordinary residents. This seemingly simple act planted an important seed in young Dieter's mind. During his time following his father in business, he not only learned negotiation skills but also appreciated the social value of providing affordable daily necessities to ordinary people. In 1973, inspired by ALDI's success, Dieter opened his first Lidl store in Ludwigshafen, Germany. It is worth noting that Lidl is not the originator of the hard discount format; the true pioneer was ALDI, founded in 1962. Seeing ALDI's success over a decade, especially the innovation of the private label concept, Dieter seized the opportunity and decided to innovate in his own way. Today, Lidl has developed into a retail empire with a complete industrial chain. The Schwarz Group has five core businesses: Lidl, as the core, accounts for 75-80% of group sales; Kaufland, positioned as a hypermarket format, has over 700 stores in Germany, complementing Lidl in the market; PreZero handles waste recycling and circular utilization, reflecting the commitment to sustainable development; Schwarz Production is responsible for producing private label products; and Schwarz Digits undertakes the digital transformation, potentially making Lidl the "Amazon of food retail." This full industrial chain layout demonstrates Lidl's strategic vision: not only focusing on front-end store operations but also building competitive barriers through production, logistics, environmental protection, and digitalization, achieving full-chain control.
**Low price does not mean low quality** As Ronny Gottschlich, former CEO of Lidl UK, said: "For a long time, there has been a misconception in some national markets that discount stores are cheap because they sell low-quality goods. The opposite is true: providing quality products is the foundation of a discount store. They may not be the top-tier products, but they can indeed offer consumers high-quality goods at the most competitive prices. It is this 'quality at a good price' philosophy that has driven the boom in discount stores in recent years." The essence of Lidl's business model is a retail system with "low price and high efficiency" as its core competitiveness, and its success stems from building an interlocking operational closed loop. The essence of the hard discount model lies in precise control of consumers' "material desires." Based on a deep understanding of customer expectations, it simplifies the SKU matrix to meet and moderately exceed customer expectations. After determining the product mix, Lidl focuses on private label development, establishing long-term strategic partnerships with suppliers, compressing costs while ensuring quality, and ultimately achieving "quality at low prices." This limited category strategy allows small stores to fully display the product range, significantly reducing property operating costs. At the same time, Lidl adheres to extreme store operations. Unlike many retailers distracted by online business, Lidl chooses to focus on offline stores, perfecting every aspect. This "simplify the complex" strategy seems easy but is actually the hardest to execute. Many retailers fall into the trap of continuously adding new categories and services to cater to different consumer needs, ultimately leading to operational complexity and rising costs. Lidl, however, achieves both high efficiency and low cost through strict product control and standardized operational processes. 2023 data shows that Lidl has 3,600 stores in Germany, with an average store area of 935 square meters and sales per square meter as high as 10,100 euros, far exceeding other local retailers. It is worth mentioning that in previous years, Lidl's sales per square meter lagged behind ALDI in the German market, but in recent years, with digital support and more personalized product development, Lidl has overtaken ALDI in this key indicator. This catch-up trend demonstrates the continuous innovation vitality and long-term competitiveness of Lidl's business model.
We randomly interviewed several Lidl consumers in the European market to understand whether their perception of Lidl's brand value aligns with what the company intends to convey. Surprisingly, respondents commonly used words like "selected products," "great value," and "reliable quality" to describe Lidl, which precisely correspond to the company's core value proposition. This phenomenon reveals three key elements of Lidl's success: first, the company has established clear value trade-offs, not blindly pursuing the richness of products in the high-end market; second, it precisely targets the core needs of its target customer group, focusing on providing a quality and affordable shopping experience; finally, through consistent business practices, it ensures that brand promises perfectly match consumer perceptions. This "walk the talk" approach to brand building is the fundamental reason Lidl wins consumer trust.
**Food must never become a luxury** A senior Lidl executive in Germany once firmly stated: "Food must never become a luxury." This phrase captures the core mission of the hard discount industry. In a global environment of sustained high inflation, consumers in various countries face rising prices and economic pressure. Therefore, more and more consumers, including the middle class, are turning to discount stores for high cost-performance shopping experiences. Even Walmart's latest earnings report revealed a noteworthy detail: a group of high-income consumers are turning to their hypermarkets for daily necessities. In this economic environment, Lidl adheres to the principle: regardless of economic conditions, maintain the same product value standards. If cost increases cause discrepancies, they control costs by simplifying operational processes and product structures, rather than reducing quality or significantly raising prices. This philosophy is reflected in Lidl's communication positioning with consumers: first emphasizing "High Quality," then "Low Prices," and finally "It's quite simple." In terms of store operations, Lidl currently has five main store formats, precisely positioned for different market environments and consumer groups: the basic store format is the most numerous, most cost-effective standardized store, with SKUs between 2,800 and 3,200, maintaining a 7:3 ratio of food to non-food SKUs; the city store format has a smaller area, focusing on urban core areas, mainly serving office workers, singles, and the elderly, offering more ready-to-eat meals and small packages; the urban store format is Lidl's innovation laboratory, with a sales area twice that of regular stores, used to test market reactions to non-food categories to further optimize the regular store product matrix; in addition, there are professional retail center store formats within shopping malls and special store formats in scenic areas. During field visits, the first impression of Lidl stores is clean, tidy, and orderly, with a minimalist style that precisely reflects its brand value proposition. Compared with typical discounters, Lidl's store aisles are designed wider, providing a more comfortable shopping experience, which is part of its differentiation strategy. In terms of staffing, with the proliferation of self-checkout equipment, Lidl stores have reduced from about five employees in the past to about three regular employees now, significantly improving operational efficiency. At the same time, Lidl arranges 1-2 part-time employees during peak hours to provide additional services, which is another differentiation feature. This flexible staffing configuration ensures customer experience while controlling labor costs. In pricing and marketing, although both Lidl and ALDI follow the principle of "first price is final price," Lidl's promotions are relatively more flexible, while ALDI pursues it more extremely. Lidl's price tag design is also distinctive: the top shelf uses enlarged labels for easy identification from a distance; the bakery section labels are divided into two parts, with a special allergen warning area, reflecting its emphasis on customer experience. It is worth mentioning Lidl's "middle aisle" strategy—updating 100-200 non-food SKUs weekly, mainly selling private label non-food SKUs. These products are of good quality, highly competitive in price, and sold for a limited time and quantity, generally not restocked. This strategy not only increases customers' "treasure hunt fun" but also boosts store traffic and additional sales. In addition, Lidl regularly holds themed weeks such as "Japan Week," temporarily introducing specialty products from other countries, bringing freshness and shopping experience to consumers. In terms of private labels, Lidl is one of the few food retail enterprises globally that fully opens its supplier list to the public. What domestic peers should note is that 75% of its non-food suppliers come from Asia, mostly Chinese companies, mainly concentrated in Guangdong and Jiangsu-Zhejiang regions. In other words, Chinese suppliers that can provide standard-compliant, high cost-performance products to the world's top hard discount supermarket can also become potential partners for domestic discount retailers. Lidl's private label packaging design strategy has also evolved. Early on, like many discount retailers, their private label packaging imitated well-known brands to help consumers build purchase confidence. Now, Lidl's strategy has upgraded: newly launched private label lines try to avoid the style of well-known brands, but in terms of design sophistication and convenience, they still benchmark against mainstream brands, successfully blurring the line between private labels and well-known brands. Although Lidl does not offer online delivery services, it actively develops its app to gain insights into consumers' personalized needs through data, further optimizing the SKU matrix and improving per-product profitability. This indicates that Lidl is exploring a future development path that combines digitalization with physical retail. Finally, regarding employee treatment, Lidl overturns the common misconception about discount stores. They do not reduce labor costs by suppressing employee wages. On the contrary, in every European market Lidl enters, its employee wage levels rank among the top in the supermarket industry, and it has been repeatedly rated as a "Best Employer." This respect and good treatment of employees not only reduces turnover rates but also ensures service quality, forming a virtuous cycle. Lidl's success tells us that the true hard discount model is not simply "cheapness," but through systematic efficiency improvement and consumer insight, providing the public with high-quality and reasonably priced goods, realizing the beautiful vision of "quality life, accessible to all."


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