July 3, 2015

Run on Lidl stores in Greek financial crisis

Lidl store in Greece (photo: LZ-Archiv)
Last resort for Greek consumers: While politicians and corrupt elites squabble, unpretentious Lidl offers the people a square deal (photo: LZ-Archiv)
As smirking Finance Minister Yanis Varoufakis plays Easy Rider on his motorbike, and Merkel, Schäuble, Lagarde and Juncker look grimmer by the hour for the camera, the Greek tragedy unfolds apace. Nemesis here takes the ugly form of more than €320bn in unsustainable debt. 

Regardless of the outcome of the national referendum on the international bailout this Sunday, there is no doubt as to the protagonist: the Greek people. Forced to choose between the bitter cups of chaos or further decades of grim austerity, like the tragic hero of old, they seem damned whichever way they turn.

It is an ill wind indeed, however, that blows nobody any good. The tormented country may be grinding to a standstill, but the 220 discount stores of Lidl Hellas continue to do a rip-roaring trade. So it must come as an irony for those Greeks who see the German financial machine as their oppressors that it is a German retailer who gives them the best bargain on the High Street.

Lidl advertisement in Greece (photo: LZ-Archiv)
Solid as Mount Atlas: Lidl's 220 Greek outlets beat its average store revenues in Germany (photo: LZ-Archiv)
But it can't surprise. In a country that spends 28 per cent less on food than at the start of the world financial crisis in 2008/09 any help towards making an ordinary person's budget go just that little bit farther is bound to be appreciated.

Arch-rival Aldi having quitted the scene in 2010, Lidl is in a unique position to profit from the situation. Asked for a comment by this newspaper, the Schwarz Group subsidiary replied as usual in its terse, legalistic phrasing, but with an unmistakable message:

"We can confirm that a higher customer frequency could be observed in our stores over the last days. Our stores remain open to customers at the usual hours, and of course we shall continue to accept credit cards...Our express goal is to stay in Greece and thus to continue making our contribution to the economic development of this country."

Media Markt sees it through

The only other large German retailer to have remained in Greece is Metro Group entertainment electronics subsidiary "Media Markt". They told us: "Our branches are and will stay open, we accept both cash and credit cards, we are well prepared. In the event that Greece would leave the euro, we would reassess the situation, but currently we are working on the basis that nothing would change in the way we proceed."

This is brave stuff when one considers that the average Greek, after facing long daily queues at the petrol station and ATM, is highly unlikely to splash out on consumer electronics.

Media Markt's sister company Makro Cash & Carry is surely relieved to have sold its nine outlets to local retailer Sklavenitis as from January 30. However, parent company Metro Group insists that exit "had nothing to do with the country's macro-economic situation".

Head office in Düsseldorf points instead to corporate strategy and the need "to focus on those countries where we have critical mass and a relevant market position..."

Those who must remain

Those who remain face serious challenges. How will Lidl and Media Markt cope, for instance, with the rampant inflation that would inevitably follow Grexit and the reintroduction of the drachma? Retailers seem to thrive on mild price inflation, but the experience of, for instance, Carrefour in Brazil with mega-inflation in the past is not for the faint-hearted.

And even if annual revenues at Lidl Hellas were to grow at, say, 35 per cent, how would that help the Schwarz Group balance sheet denominated in euros, if the drachma devalues 45 per cent? So Lidl must either have a damned good "Plan B" in its drawers or is in the country for the very, very long run. See you in 40 years' time?

Syriza plays brinkmanship...

Meanwhile, it is reassuring to know that at least Yanis Varoufakis is not worried. This morning on BBC World Business News here in Frankfurt we were treated to another smug interview along the lines of "things may well have to get worse before they can get better".

This is easy to say when you are a privileged left-wing academic with a beautiful wife and a beautiful motorbike, but not so easy to endure when life is a daily struggle for the people one claims to represent. 

Here one is tempted to quote from Lord Byron's great poem "The Isles of Greece": "You have the letters Cadmus gave –Think ye he meant them for a slave?"

Admittedly, later in the same poem he wrote: "Trust not for freedom to the Franks", but do the kind, warm-hearted and hospitable Greek people, who cast their vote in the hastily-called referendum on Sunday, really know who their oppressors are?

There is one thing they can be sure of, however, and that is who gives them the best price when they shop. As the ideologies of unbridled capitalism and of the intransigent left, viz. Syriza, both seem to have failed, perhaps the Greeks should experiment and let a no-frills retailer run their country.

Lidl sign on the Parthenon

The Greeks have long had the gaiety of Alexis Zorbas beaten out of them by the international financial community, so there would be little to lose, if the humdrum and prosaic Swabians held sway. Romantics would doubtless sigh to see an illuminated "Lidl" sign looking down from the Acropolis over Athens, but at least the Isles of Greece would be run efficiently.

Podcast microphone (photo: Gerhard Seybert-Fotolia)
(photo: Gerhard Seybert-Fotolia)

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

Lebensmittel Zeitung with digital sister (photo: LZ)
Our German B2B newspaper, Lebensmittel Zeitung, in print & digital
Read in German: 'Deutsche Händler trotzen griechischer Finanzkrise' by international editor Mike Dawson on page 4 of
Lebensmittel Zeitung, no. 27, 03.07.2015

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Comments for this article are closed.

  1. Ian Pollard
    Created 31 August, 2015 20:22 | Permanent link

    Lidl's Appalling Lack of Service

    Obviously the author has never tried shopping in Lidl supermarkets in Greece, where the customer comes last by a long way. Endless queues because most of the check-outs are closed. According to Lidl, staff queues of seven are acceptable, and management will not allow more tills to be opened until queues exceed seven people.

    And then there are the empty shelves. Last week just before the busy Friday evening shopping night, not a single lettuce in sight and no signs of any intention to restock. My local Lidl, which appears to have the worst management of any Lidl store I have ever shopped in, can regularly run out of basics, such as bacon, eggs, Nescafe, Alte Exellenz chocolates, which it has stocked for years, and its regular brands of cat food. As far as bacon is concerned, it once created the record of not having any for several months.

    And Lidl doesn't care less. You can complain until you are blue in the face. But you are only a customer, and Lidl's German management philosophy knows your place -- at the end of the longest queue possible short of causing a riot.

  2. Wolfgang
    Created 15 January, 2016 15:07 | Permanent link

    How to treat the Greeks

    Might I suggest shopping at Vasilopoulos or Sklavenitis then? Lidl is often fined by the standards agency in Greece for selling colored vegetable oils as olive oil, or for selling contaminated products.

    I don't care if they are German, AB Vasilopoulos is owned by Belgians. I care that their approach to customers, in comparison to my Lidl experience in the UK, is that of second-class Greeks. I am appalled that this has become the way many of my German countrymen talk, treating Greeks in a manner reminiscent of the darker pages in our history.

    Have we not learned anything from the 20th century?

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