“QUALITY for less,” screams a new billboard ad for supermarket giant, Lidl. “If they are good and cheap they are Carrefour,” boasts another just a few metres away, strategically located down one of Nicosia’s busiest roads. Switch on the TV or the radio and you are bombarded with a whole series of adverts making similar claims.
Local supermarket chain Orphanides has gone a step beyond advertising, having just opened up a brand new store just a stone’s throw away from where Lidl have set up base in Nicosia’s Pallouriotissa district.
As the grand opening ceremony of seven Lidl stores island-wide approaches this Thursday, it’s hardly surprising that competitors are scrambling to secure their share of the market, beefing up their own advertising campaigns which are jammed packed with all sorts of special offers.
Intent on infiltrating the local market in style, the German discount chain that so far operates about 9,000 stores in 25 countries will be simultaneously opening outlets in Pallouriotissa and Lakatamia in the Nicosia district, Larnaca, Aradippou, Kokkinotrimithia, Limassol and Paralimni. More stores will be opening in the near future, but dates and places are yet to be confirmed.
Advance publicity has been intense: thousands of us have had Lidl leaflets pushed through our letter boxes, while shoppers in city centres have been handed promotional Lidl bags with scarves, chocolate and fridge magnets.
“Our goal is to eventually fully cover the geographical area of Cyprus in order to be able to serve even more residents,” says PR Manager of Lidl in Cyprus, Vasiliki Adamidou.
Lidl may be famed for cheap prices, but so far the general public has been kept in the dark about what “cheap” means. The promotional leaflets list some of the products available, but no prices.
So are we really talking about cheap prices? “Absolutely,” confirms Adamidou. “There will be an obvious difference in prices, and we will definitely be cheaper than other competitors with relatively low prices.” The cheaper prices, she said, will include local products too.
The big hush-hush about price tags is all down to a corporate decision not to give any indication of exact figures before opening. “We want people to come and see for themselves. This is a communications strategy of our company that we have to comply with and Cyprus is no exception.”
Meanwhile catchy Lidl billboard adds across the country are keen to point out that cheap prices don’t mean a cut in quality.
Quite ironically, the TV ads here in Cyprus focus on a young, well-travelled young lady who loves to visit all the Lidl stores on holiday; certainly a far cry from the image Lidl has conjured up abroad as a chain catering to the lower end of the market, big families on a budget in particular. The store however insists that they don’t have any one type of client in mind. “We’re not targeting a specific section of the market; we just don’t believe that smart buying has a target,” states Adamidou.
So if there’s no cut in quality, how does the German chain manage to keep the reputed prices so low? “With stores in 25 countries we obviously have a big supply of products,” says Adamidou. “In some cases orders are made months before for all 25 countries – ordering in bulk obviously brings down prices.”
The low prices are also achieved because shop overheads are kept to a minimum. To accomplish this, stores are located where land prices are lower, store furnishings are kept to a bare minimum and you pay for carrier bags. “We don’t have much personnel in the store and products are laid out in such a way so that you can easily get to them without needing help.”
Plenty of local produce as well as freshly baked goods will be sold on Lidl shelves in addition to its own brand labels. “We’ll be selling local products that Cypriots know and trust and we’re working with big suppliers.” Adamidou said that other supermarkets have been pressurising suppliers not to provide Lidl with local goods, but in such a small market, it’s hardly surprising that such rivalry should exist .
“We always have these problems when we enter a new market and we’re not threatened by it.”
Apart from food, Lidl will stock just about anything and everything to cater to those looking for a bargain including clothes, electronic products and home wear.
“We’re not entering the Cypriot market to close down other supermarkets but to simply make competition healthier and give buyers a choice. Maybe people will find us better than the rest but they will be the judge of that,” Adamidou insists.
Orphanides – who already has 23 supermarkets under its belt – seems to be taking the Lidl challenge particularly seriously, having just opened the new Pallouriotissa store, while also planning to open soon near Kiti in Larnaca.
By the end of 2011, another nine Orphanides stores will be opening including an Orphanides Express down Nicosia’s Onasagorou Street and what used to be Larnaca’s Othellos Cinema. Larger stores will be opening in across the island including in Polis Chrysohous, Astromeritis and Alambra. Their new marketing strategy involves reaching out to female customers, now advertising the allure of a set of pearls to be given at a discount price with the appropriate coupons handed out on every purchase.
The Nicosia based Athienitis, which has earned the reputation of stocking some of the cheapest supermarket prices on the island, appears to be less fussed about Lidl’s grand venture. Relying largely on dedicated clientele and world of mouth, Athienitis don’t feel the need to launch alluring advertising campaigns or change their marketing strategy. “Our prices are always low and people know that. We don’t fluctuate like some other supermarkets do,” says the shop’s General Manager, Othonas Hadjichristofi.
“I don’t believe that Lidl are going to be selling that many local products, at least not nowhere near as many as we do here,” he adds. “Of course whatever new shop opens may take a portion of the existing pie but I feel Lidl is in a whole different category. I don’t think the situation will be tragic the way some shop sellers have made it out to be at all. I suppose only time will really tell.”
As for smaller supermarkets and corner shops struggling to survive, one has to wonder if the opening of Lidl is just another nail in their coffin.
“A lot of customers come in here for a regular supply of fresh fruit and veg as well as other essentials on their way home,” says one shopkeeper. “I don’t think Lidl will be a threat to us. I highly doubt our regular clientele will change because of Lidl.”
Another smaller shop located in close proximity to one of the Nicosia branches of the new German chain is a little more hesitant. “You just never know the way things are going these days,” says the owner. “People want to economise and if they find somewhere that brings things in bulk then prices are obviously going to be competitive. It’s hard for us small guys. But all these big chain supermarkets seem to be opening up just about everywhere and I think the people that know us for so long will keep on coming.”
