Interesting piece in Forbes about how Tesco is trying to block the expansion of discounters Aldi and Lidl in Ireland by filing repeated objections to construction permits being sought by the two German retailers there.
While the discounters say the objections are anticompetitive, the Forbes piece says that they actually reflect a heightened sensitivity to the damage that Aldi and Lidl can do to traditional retailers. They were taken too lightly in the UK, and it is a mistake that Tesco, for one, seems unwilling to make again.
And, the story says that it "is a lesson for Aldi and Lidl in the United States. These two aggressive food discounters will not be welcomed with open arms by their competitors. Even more so as the competitive threat is broadening as Aldi and Lidl begin to sell fresh fruit and vegetables, as well as frozen products through offerings on the Internet available for quick home delivery. Supermarket chains like Kroger, and discounters like Walmart and Target, must prepare a competitive response."
While the discounters say the objections are anticompetitive, the Forbes piece says that they actually reflect a heightened sensitivity to the damage that Aldi and Lidl can do to traditional retailers. They were taken too lightly in the UK, and it is a mistake that Tesco, for one, seems unwilling to make again.
And, the story says that it "is a lesson for Aldi and Lidl in the United States. These two aggressive food discounters will not be welcomed with open arms by their competitors. Even more so as the competitive threat is broadening as Aldi and Lidl begin to sell fresh fruit and vegetables, as well as frozen products through offerings on the Internet available for quick home delivery. Supermarket chains like Kroger, and discounters like Walmart and Target, must prepare a competitive response."
- KC's View:
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Excellent point. My general position is that if you are in a business where a discounter could impact your sales, you need to begin competing against the likes of Aldi and Lidl even before they open in your neighborhood.
