Lidl is a German supermarket belongs to Schwarz Group. It was founded in 1973 and currently operates in 30 countries across the globe. Here is the detailed PESTEL analysis of Lidl (Lidl, 2021).
Lidl – Political Factors
As the first component of PESTEL analysis is political factors, it is necessary to understand its impact on Lidl. As the government intervenes the economy, supermarkets like Lidl has been effected by it. Taxation policies of the country along with minimum wage rate has great impact on Lidl. If government set the minimum wage rate, people are less likely to work in low salaries. This will give the tough time Lidl to hire good employees. Moreover, if the government imposes high taxes on high income people, consumers will be able to spend less on other things, hence sales of Lidl will be affected. It is important for the company to understand the policies of economies it is operating in to make its business profitable (UK Essay, 2018).
Lidl – Economic Factors
Economic factors are very important to consider while analyzing the business. Disposable income of people plays an important role as more disposable income, people will be likely to spend more on groceries and other items, or else they have to spend on basic necessities only. This greatly affects the sales of Lidl. Moreover, recession or inflation will also affect the sales of Lidl, as people tend to spend less on products other than necessities. In UK Lidl will be less affected by imports and tariffs as it relies on locally produced items rather than exports (Murphy, 2018).
Lidl – Social Factors
Lidl has faced challenges regarding attracting consumers of all ages who actually value its products. It targets low-class customers since decades, but now looking forward for middle and upper middle-class customers to compete with rivals in the industry. It believes in changing the customer perception and provide them memorable experience. It has been engaged in providing health products like it removed artificial colours from label products. It provides sustainable source of fish which is certified from health department. It considers its customers seriously and build strong relationship with them (SWOT AND Pestel, 2020).
Lidl – Technological Factors
Lidl has to focus on technological advancements in order to maintain the market share and position. In 2017, it was successful in putting the contract for biggest regional distribution Centre in Peterborough. This distribution will be going to use efficient energy methods and zero-carbon technologies. It also helps economy in generating employment. However, investment of Lidl is very less in technology. As being a discounter, it is necessary for it to minimize the costs and make expensive investments in technology like self-scanning in stores (SWOT AND Pestel, 2020).
Environmental Factors
Consumers are now more aware environmental sustainability and carbon footprint emissions. They are becoming more concerned about environment. Hence, it becomes necessary for the companies to take initiative ls to protect environment and hence captivate more customers. Lidl consider its utmost duty to protect the environment by sending the message of “A Better Tomorrow”. It promotes reusable bags that are easy to be made by recycling plastic and cardboard. It uses motion sensors in warehouses along with intelligent lighting system to reduce the electric consumption. It prefers optimal planning delivery procedures to reduce the timing and cost (UK essays, 2018).
Legal Factors
Grocery industry operates in fast-paced environment, where it is important to respond to all rules and regulations in order to avoid the negative outcome and cost of reputation. Lidl make sure to work according to the laws set by the economy. Lidl make sure to respond to issues a d compromise on the situation if needed to avoid the negative image of the company among consumers (Murphy, 2018).
Conclusion
Lidl is growing and setting itself in the industry and made its own place despite numerous challenges like critics on attracting large number of consumers. However, it is making itself prominent in the industry by targeting local manufacturers and hence, is quite successful in running its operations. It considers PESTEL analysis and try to overcome the areas where it is lacking.
References
Lidl, 2021. About us. [Online], Available at: https://www.lidl.com/about-us, [Accessed on: 19th June, 2021].
Murphy, F. 2018. LIDL PESTEL and Environment Analysis. [Online], Available at: https://www.essay48.com/term-paper/13726-Lidl-Pestel-Analysis, [Accessed on: 19th June, 2021].
SWOT AND Pestel, 2020. PESTEL analysis of LIDL. [Online], Available at: https://www.swotandpestle.com/lidl/, [Accessed on: 19th June, 2021].
UK Essays. 2018. Lidl PESTLE and Micro Environment Analysis. [Online]. Available at: https://www.ukessays.com/assignments/lidl-pestle-micro-environment-7832.php?vref=1, [Accessed on: 19th June 2021].