September 15, 2014

Aldi, Lidl and Scottish independence

Scottish bagpipers parade past a Marks & Spencer outlet (photo: Dave Conner_Flickr)
Proud bagpipers: Marching for or against?
As Thursday's hotly contended referendum on Scottish independence draws ever closer, German discounters active throughout the UK look set to profit whatever the outcome.

At first blush, this may sound counter-intuitive for nothing will change if the Scots vote No to independence and Aldi and Lidl would retain their status as foreign investors in the event of a "Yes Scotland" decision.

But both no-frills retailers could gain a number of brownie points with Scottish consumers after the referendum, if they continue to play their cards right.

Wisely Aldi and Lidl, who are rapidly growing their local store count (currently 55 viz. 90 outlets), have kept out of the debate. Both have been content to let fools rush in where angels fear to tread.

These do not only include David Beckham or Mick Jagger, who have little or nothing to do with Scotland, but also most of the big retail multiples from south of the border.

Warning or threat?

The bosses of Marks & Spencer and Kingfisher have written that their distribution costs would rise in an independent Scotland − claims that have been echoed in the press by the CEOs of Asda and Morrisons.

Despite tartan counterclaims that any rises would be compensated by a reduction in corporation tax, such statements imply that an independent Scotland would represent a less attractive investment proposition for business and that prices would increase for local consumers.

Also Tesco Bank issued a news release last Thursday stating that "our contingency plans include the creation of a new registered company, domiciled in England" but that there would be no "immediate impact" on jobs in Scotland.

All this could easily backfire for a number of reasons.

MacAldi & MacLidl

Any price hikes would play into the hands of Aldi and Lidl who have thoroughly enjoyed chipping market share away from the big multiples over the last few years. The canny Scots would simply flock to the discounters in droves.

And however subtly the major UK retailers believe they have couched their words, while pleasing establishment circles in Westminster and the pro-Union "Better Together" campaign, they risk being seen as a veiled threat and as Sassenach "scaremongering" by the No clan.

As with all Celtic nations, memories run deep in Scotland. Therefore, even in the event of a No vote, Tesco and other multiples based in England could be remembered as partisan by around half of all Scots voters and seen as more "foreign" than Aldi or Lidl.

Both, presumably, are completely indifferent as to whether their tills ring in English pounds, Scottish pounds or euros north of the Tweed, and will be happy to continue sourcing local quality products from salmon to whisky. Small wonder then that Richard Holloway, Aldi's MD for Scotland, says: "Our commitment to the country will remain unchanged."

Salmond and his cat  

Meanwhile, despite most international smart money still betting on a No vote by a wee majority, Scottish Nationalist Party leader Alex Salmond has certainly set the cat among the English pigeons. He might, however, find that severing the 307-year-old union with England has let the genie out of the bottle with the Highlanders demanding independence from their Lowland brethren! 

At least the whole story has given parts of the German media a field day caricaturing the decline of the "British empire". But it would be interesting to know if Germany would view with quite such equanimity the secession of, say, the Swabians together with their Porsches and Mercedes etc.

It is almost a moot point whether one subscribes, or not, to the opinion of Deutsche Bank that Scottish independence would have a depressive impact on the English economy. If it does, there will be one big gainer in any rump UK: the German discounters.


This post represents the personal opinion of an Englishman only...


Podcast. Click arrow to listen to an audio version of the text:





Comments for this article are closed.

  1. Created 17 September, 2014 16:31 | Permanent link

    Another informative and interesting blog on an international marketing story from a top commentator...Mike Dawson.

  2. Paddy19
    Created 18 September, 2014 14:44 | Permanent link

    Zip it and look after your shareholders' interests

    Great article, Mike, I too was amazed that big UK retailers stuck their nose in the Scottish referendum hive.

    As you say, why alienate nearly half of your potential customers?

    The only conclusion is that the fat-cat cartel that runs the UK pressurised the CEOs to get on message.

    The CEOs would have been better off to zip it and look after the interests of their shareholders.

  3. StillYes
    Created 16 October, 2014 22:46 | Permanent link

    I wish there was an Aldi or Lidl near me. Or that they did online shopping and delivery. I appreciate their neutral stand. I would prefer to use them, if I could. I also wish them success and hope they expand in Scotland.

  4. James Galt
    Created 4 February, 2016 09:58 | Permanent link

    Aldi, Lidl, & Scottish Indepenence.

    Living in Scotland the feeling towards retailers and manufacturers who expressed a threat to leave should the vote be "yes" is still quite hostile.

    There are lists of companies to be avoided: Tunnocks, RBS, etc. In fact, any and all of above are suffering more now due to Scottish people feeling betrayed by these companies lying about the consequences of independence even if they voted "no".

    I shop exclusively at both Aldi and Lidl, the rest can go south.

This is an English-language blog, please write all comments in English!
Thank you.

stats