Why is Lidl so Cheap? 2021 + 7 Tips to Save Even More

Do you ever wonder why Lidl is so cheap compared to the UK supermarkets?

Read on to find out why, but also check out extra tips to save even more on your Lidl shop.

Lidl Store - Why so cheap?
Why is Lidl so cheap?

Why is Lidl so Cheap?

There are various factors which all combined together give the answer as to how Lidl offers its fresh produce and products so cheaply.

Stocking fewer product lines, needing smaller stores and less staff are just a few of the ways they keep costs and therefore prices so low.

Much like how ALDI is so cheap, we take a look at each factor below.  Although they are similar there are some differences too.

Founded as a Wholesaler

LIDL’s parent company  Schwarz Group was initially founded as a wholesaler in 1932.  This meant from the very beginning it was a business that was used to selling large quantities of stock at very cheap prices, but to retailers rather than individual customers.

It wasn’t until 1973 that the business we know today as LIDL embarked on opening discount stores directly to customers.  In doing so they used many of the whole strategies in order to keep prices as low as possible for customers.

A trend that has continued to this very day with stores opening in many parts of the world.

Just like a wholesaler they offered bulk quantities of relatively few different products at very low prices.

Small Outlets

Offering fewer product lines compared to other UK supermarkets means LIDL only needs small stores in order to stock everything adequately.

Each store typically holds 1000-1500 different products.  Compare that to Sainsbury’s, ASDA or Tesco which will often have 40,000 to 50,000 different products in a single store.

Therefore requiring much larger shop floors and warehousing to store the products.

Smaller stores also mean smaller car parks required.

Fewer Members of Staff

With smaller stores and a lot fewer lines to manage means, LIDL doesn’t need as many members of staff on the payroll compared to the big UK supermarket stores.

The UK supermarkets tend to have many more departments which are all staffed individually.

For example:

  • Beauty products
  • Frozen food
  • Provisions (refrigerated)
  • Dry goods
  • Fresh meat
  • Checkout only
  • Warehouse staff

Many of these staff will be focused purely on the work in their department, with some maybe being called on for checkout works when its busy.

The disadvantage of this is if someone is off (holiday/sick) sometimes the job isn’t done properly.

With Lidl staffing, there are many more all-rounders who will work across a range of jobs for the store rather than a department.

Elite Levels of Efficiency

Lidl the business is built on elite levels of cost-saving efficiency.

Every aspect of the business is considered when it comes to cutting costs.

  • More and larger barcodes on products
  • Lighting sensors so not on when not needed
  • Items out of lorries/warehouse in the order they can go on the shopfloor
  • Whole cases of products piled high on the shop floor rather than 1 or 2
  • Shelf measurements same in every store
  • No store no music – no license fees

Tough Discounter Competition

One of the reasons LIDL which has possibly contributed to the low prices is the competition with fellow German discounter ALDI.

In order to be the cheapest, they have both had to be ruthlessly as efficient or more so than the other in order to be the cheapest.

UK supermarkets are have not competed in this way on such a level, more so they competed much more on par.

When it comes to completion they couldn’t have had it any tougher than against ALDI, which no doubt benefited from the competition too in driving its own efficiency for low prices.

Less Waste

If you are a regular shopper in LIDL you may have spotted the 5kg Too Good to Waste fruit and veg box for just £1.50.   It’s a box full of a random selection of fruit and vegetable products that can’t be sold but are in too good condition to be thrown away.

This is just one example of LIDL selling products that certainly in the past other supermarkets would have wasted.

Reductions

Lidl do their reductions early in the morning.  This gives them the whole day to sell.

In comparison to some of the UK supermarkets which leave reductions quite late in the day, which if they aren’t sold, or with so many thousands of lines some are missed, just leads to more waste.

Buying Power

Another huge factor in Lidls favour for keeping prices low is its buying power.

It has the financial muscle to compete with the largest UK supermarkets and command the best prices for huge orders.

This is helped by it stocking fewer lines and therefore the buying power is even more concentrated.

However, it also helps when they come to stocking items for the middle aisle they can place huge orders for stock and therefore get at the lowest price possible.

This is how they manage to offer products so cheap for events like the Lidl Baby event.

Sells Own Products

The vast majority of the products Lidl sells are its own brands under different labels.  Although it may offer a few well-known brand name products even for those it will offer its much cheaper copy cat-like version.

As you may know, when you buy big brand products you are paying for the brand name rather than better quality ingredients.

Lidl specialises in creating extremely similar products, many of which taste or in some cases smell (perfume, candles) exactly like their much more expensive well-known brand counterparts.

Lidl can pass all these savings on to the customer.

Cheapest Supermarket of 2020

Lidl is so good at keeping prices cheap it was according to Which? the cheapest supermarket of 2020 with ALDI coming a close second.

Is ALDI or Lidl the Cheapest

Over the whole year, Lidl was found to be the cheapest.  However, looking at the Which? results each month, ALDI and LIDL would be top at different times.

Just checking the latest 2 months when completing this post, ALDI was the cheapest in September and October 2021.  Although the difference comes down to pennies each time.

Is Lidl Good Quality?

Okay, so we know Lidl is cheap but is it good quality?

Generally, Lidl products are as good a quality as those offered by the UK supermarkets.

In our experience, the fresh produce doesn’t last as long as similar fresh produce from Sainsbury’s or Tesco’s.

Many of the Lidl copycat items seem very similar quality to even the big name brand counterparts and other supermarkets own brands, just much much cheaper.  Taste-wise they are often on par and sometimes even taste better.  Of course, for some people, there are always some products where the big name brand will always be their favourite.

7 Tips to Save Even More at Lidl

While Lidl is extremely cheap and offers very good value there are always ways to save more, in part because they will be subtly encouraged to spend more,

  1. Never shop hungry.  When you shop hungry you are much more likely to buy more food.  Especially when you pass the sweet-smelling bakery situated right near the entrance.
  2. Shop to a list.  Make a shopping list in advance and stick to it.
  3. Avoid Middle of Lidl impulse buys.  You never know what tempting random bargains you might see in the middle aisle.  If you do spot something, plan to go back for it.  If you forget, maybe you didn’t need it in the first place.
  4. Use the Lidl Plus Loyalty app.  Collect coupons and take advantage of extra deals.
  5. Scan your receipts.  Use the best receipts apps to scan receipts for money.
  6. Ditch big brands names.  If any members of the family refuse to switch from their brand favourites, consider giving them a blind taste test or find another way to disguise the product, e.g put cereal in a container rather than leave it in the box.
  7. Reuse a carrier bag.  Always remember to take a carrier bag.*

*Lidl was one of the first supermarkets to start charging for plastic carrier bags while other supermarkets were giving them away.

Hopefully, as this post has shown, with Lidl’s ruthless levels of cost-saving efficiency, it was hardly going to give away millions of carrier bags a year was it?

Conclusion

Do you shop at Lidl?

Have you spotted any extra ways they find to offer ultra-low prices?

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