A German grocery chain with the power to cripple Aldi, Whole Foods, and Trader Joe’s is about to invade America
Lidl
A rendering of Lidl’s first US store in Fredericksburg, Virginia.
The highly competitive European grocery chain Lidl is about to descend on the US, and it’s promising prices that are up to 50% cheaper than existing supermarkets.
Lidl’s first stores will open June 15, the company said Wednesday.
At least 20 Lidl stores will open this summer in North Carolina, South Carolina, and Virginia, and the chain will add another 80 stores along the East Coast by the middle of next year.
See a list of the first store locations here.
Lidl (pronounced lee-dil) plans to eventually open as many as 600 stores in the US, according to a copy of a company presentation obtained by Business Insider. Lidl currently has 10,000 stores in 27 European countries.
In the presentation, Lidl describes itself as a cross between Trader Joe’s and Harris Teeter, a grocery chain based in North Carolina.
“We are excited to open our first stores in the United States in a few short weeks,” Lidl President and CEO Brendan Proctor said in a statement. “When customers shop at Lidl, they will experience less complexity, lower prices, better choices, and greater confidence.”
The company said Wednesday that its stores will feature a “manageable, easy-to-shop layout of 20,000 square feet with only six aisles.” That means the stores will be about a quarter the size of a traditional supermarket like Kroger, which averages about 77,000 square feet.
Lidl stores will have bakeries on site — located at the entrances — and 90% of the products sold will be made by private-label brands, which Lidl said are free from synthetic colors, trans fats, and added MSG.
The stores will also carry an assortment of organic and gluten-free items including organic fruit, vegetables, meat, dairy, and packaged food items.
Overseas, Lidl is known for its rock-bottom prices, and it’s most closely associated with the discount grocer Aldi, which is also based in Germany.
But it appears Lidl is trying to set itself apart from Aldi in the US.
“After three years of research, we discovered that US consumers don’t like discount groceries,” the presentation said. “Unlike Aldi, the Lidl will be a hybrid similar to Trader Joe’s or Harris Teeter, but closer to a Trader Joe’s. We will sell high-end brands, quality not quantity, best products only.”
Locally sourced products, wine, and coffee will be focuses of the US stores, according to the presentation, which was provided to residents of a Maryland community where Lidl is building a store.
The chain’s US headquarters are in Arlington, Virginia, and it’s building warehouses in Cecil County, Maryland; Mebane, North Carolina; and Fredericksburg, Virginia.
Lidl and Aldi have expanded rapidly in the UK over the past several years and upended its grocery-store market, sending its largest supermarket chains into a price war.
The discount chains’ market share in the UK has soared to 12%, up from 5% just five years ago, while the UK’s four biggest supermarket chains — Morrisons, Asda, Sainsbury’s, and Tesco — have all seen their share of the market slide and profits slip into negative territory.
Sainsbury’s CEO Mike Coupe warned earlier this month that the Aldi’s and Lidl’s growth isn’t slowing.
“Discounters will get to 15% in this market, it’s inevitable,” he said on a call with investors, according to Marketing Week. “[To fight them] we are investing massively in online and convenience, two growth areas, and the Argos acquisition makes us a lot more attractive to mobile-savvy consumers.”
Like rival Aldi, Lidl keeps prices low by limiting inventory to a lean selection of private-label items, whereas traditional supermarkets tend to carry several brands of a single product.
Lidl also invests less in customer service and merchandising than traditional grocers, and saves money by requiring customers to bring their own shopping bags and bag their own groceries.
In the UK, most of the stores’ products are displayed in their shipping cartons to make restocking quick and easy, which means fewer workers are needed on the sales floor.
In addition to groceries, Lidl sells appliances and furniture, and it debuted a women’s clothing collection in August 2014 that sold out in the first three days. The collection included a faux-leather jacket for £15 (about $19) and chiffon blouses.
Since then, the retailer has launched a men’s collection, a line of handbags, and a fitness brand.
But Lidl will have a lot of work to do to catch up to Aldi in the US, which now has more than 1,600 stores in the country with plans to open another 600 within the next couple of years.
Read more stories on Business Insider, Malaysian edition of the world’s fastest-growing business and technology news website.
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