Lidl makes non-food a priority

Tailwind Shipping Lines, the maritime logistics company of German discounter Lidl, has added a new container vessel, ‘Panda 004’, to its cargo fleet. The investment brings Tailwind’s armada of commercial container vessels to nine, with a total capacity of 40,000 TEU (twenty-foot equivalent units). The Lidl subsidiary was set up two years ago in the wake of global supply chain disruptions to ensure ‘reliable and timely delivery of our products’, the company says. Tailwind mainly transports non-food goods from the Far East to the European ports of Barcelona (Spain), Moerdijk (Netherlands) and Koper (Slovenia).

The fleet expansion is part of a renewed strategic focus on non-food. At the end of last year, German retail media reported that Lidl was building a new 100,000 square meter logistics center for non-food products in Saragossa in northern Spain. The distribution center is expected to be operational in 2027. In addition, Lidl is currently developing a new warehouse of over 200,000 square meters in Moerdijk, which is expected to be operational by 2025.

Lidl’s logistics expansion goes hand in hand with a new strategy for its non-food range. The discounter wants to revive the appeal of its key, high-margin assortment that is instrumental in driving traffic. Since the outbreak of the pandemic, the share of non-food sales in Lidl’s European operations is said to have fallen from more than 15% to single digits. Lidl needs to counteract a slump in discretionary spending due to falling purchasing power and the emergence of strong competitors such as Dutch general merchandise discounter Action.

As part of the new strategy, Lidl will divide its non-food assortment into several theme worlds, which is said to also include permanent listings. The DIY brand Parkside will serve as role model for the implementation. Over the past two years, Lidl in Germany has almost doubled the number of Parkside items available in its online shop. While 592 products were available under the DIY brand in July 2022, the number has risen to currently 993 (see chart). Other new product worlds could include sports textiles and hard goods under the Crivit brand, as well as Livarno Home for home accessories, home textiles, decoration and furniture. Decathlon and Ikea are said to be conceptual benchmarks. The new concept is to be introduced in the stores from 2025.

As a first in the history of Schwarz Group, Lidl and sister company Kaufland in 2021 announced plans to bundle the non-food sourcing business in the Far East to be operative by the end of 2023. Current job advertisements for the new subsidiary run under ‘Lidl & Kaufland Asia PTE’ based in Hong Kong. Kaufland started in spring 2023 to include Parkside products in its assortment.