German discounter Lidl has said its ability to offer high-quality products at a low price will set its new trend-led womenswear clothing range apart from its competitors.
On Monday (August 25), Lidl muscled in for a greater share of the low-price clothing market with Esmara, a womenswear range focused on trend-led fashion including fake leather jackets for £14.99, ankle boots at £9.99 and £6.99 jeans. The supermarket, which has based its non-food buying team at its head office in Wimbledon, London, will launch a menswear collection in November.
The range, manufactured in China and Bangladesh, will be sold on a short “while stocks last” basis across all of Lidl’s 600 UK stores and builds on Lidl’s existing clothing offering, which consists of underwear, basics and kidswear. Lidl non-food manager Josie Stone told Drapers clothing is becoming increasingly important to Lidl’s business, with sales up 30% year-on-year
A Lidl spokeswoman added: “Our buyers will look at the UK market and what’s coming up in terms of fashion trends and we will make sure we’re matching that. Our USP is that we’re able to offer high-quality products at reasonable prices. That sets us apart from others. We keep prices low in two ways: economies of scale and an efficient business model. We have such a large presence across Europe – more than 10,000 stores in 26 countries. The buying power that comes with that is quite amazing. When buying at such volume you are able to get a competitive price.”
Supermarkets have been growing their share of the UK clothing market for more than 10 years. George at Asda has overtaken Marks & Spencer to become Britain’s second-biggest clothing retailer by volume, with George taking an 11.1% share of the market in the 24 weeks to July 6, compared with M&S’s 10.9%, according to Kantar.
However, experts and rivals are divided as to whether Lidl’s move to ramp up its clothing range in the UK could pose a serious threat to value fashion retailers, including supermarkets.
George at Asda’s brand director Fiona Lambert told Drapers she did not feel threatened by Lidl’s new offer. “The George brand has been going for 24 years; we were the first clothing range to be sold in a supermarket. We’re well established, we know our customers well. We try to be market leader in what we do. The range Lidl is doing is quite small. Our customers want choice and inspiration.
She said George offered its customers a broad range encompassing basics and on-trend items, which it then edits for customers who do not have much spare time. “I think we have a very different offer,” she added.
James McGregor, a partner at consultancy firm Retail Remedy, said Lidl’s move was unlikely to cause the major supermarkets any great concern. “No-one is going to make it a destination store [for clothing].”
Mintel European retail analyst John Mercer added: “Lidl operates only small stores so they could offer only a small amount of clothing. Also, they put most of their non-food in dump bins for people to rummage around in, so it’s not really a good in-store experience for fashion.”
But the chief executive of a high street supplier said Lidl might be able to compete in the fashion stakes, as the buying team is UK based. “The high street supermarkets here are very fashionable – but if Lidl’s buying team is based in the UK, they could be too.”
Lidl and Aldi have continued to seize market share from the big four grocers in recent years, as value continues to be a driving force for the British consumer. Kantar Worldpanel analyst Glen Tooke said: “Discount supermarkets have a history of disrupting the fashion market. When Aldi stocked a range of back-to-school clothing last year, offering a full uniform for just £4, it took 4.2% of all uniform sales. Clearly, there are opportunities at the discount end of the market, particularly if products are promoted well.”
Supermarkets account for £1 in every £10 spent on clothing, footwear and accessories in Great Britain (and nearly 1 in every 4 items bought).
Just over two thirds of the population has bought at least one fashion item from a supermarket in the past year.
Supermarkets are strongest in kidswear (38% of all volume sales) and underwear/socks (30% of all volume sales).