Lidl UK: country of origin and the UK grocery market

This case study examines the Lidl grocery chain and its expansion into the UK grocery market. Lidl entered the UK in 1994 and now has more than 600 UK retail outlets. The case study looks specifically at Lidl’s international expansion through the lens of country of origin theory as it is a well-established principle that consumers make judgements about foreign products, brands, and services based on the country from which they come and that those judgements influence the conclusions they form when making purchase decisions. Consequently consumers must be willing to accept the foreign based competitor into their local marketplace if the foreign brand is to establish itself against home-grown competitors. Part 1 of the case study considers country of origin theory. A brief summary is given of literature on the subject including thinking on country of origin within the grocery sector. In Part 2 background is given on the Lidl grocery chain itself. In Part 3 the case study considers how Lidl positioned itself to gain brand acceptance from local communities. Part 4 considers what lessons can be learned about internationalisation of brands from the way in which Lidl has integrated itself into the UK retail grocery market.