Last year, German supermarket chain Lidl generated $96 billion in revenue from 10,000 locations by selling mostly their own private label brand. This Summer, they are opening their first stores in America with this decidedly countertrend stance: limited choice.
Lidl’s label makes up 90% of their stock, most at a significant Trader Joe’s-esque discount. They will not have all the brands we’ve come to expect from a visit to the grocery store, but as a top Lidl executive (gosh that’s fun to say aloud) recently asked “Do you need fifty labels of ketchup?”
That’s an interesting, and decidedly non-American, perspective. CPG marketers here have long played the line extension game, empowering consumers with brobdingnagian choice and a dizzying need for descriptive modifiers: Diet Caffeine-free Cherry Coke Zero anyone? Or as was just announced today, care for any of thirty new product innovations from Mars Wrigley?
If Lidl succeeds with this approach in grocery, it will signal bricks and mortar following the digital lead, where the sheer overwhelming volume of information and content made curation a platform necessity. This move to curation in real life is already happening with the decline of department stores–could the pendulum is swinging to include consumer packaged goods as well?
We have a Dunbar number for the amount of stable relationships we can maintain; maybe there’s some similar number for our brand relationships…a Done-thinking number®.
For food companies, that’s a rather sobering thought.