Lidl follows Aldi to the U.S.
Lidl, the giant German limited-assortment grocer, officially revealed plans to expand into the U.S. the same week its arch rival Aldi announced plans to open its first stores in California.
Lidl will invest a total of $202 million to establish its U.S. corporate headquarters in Arlington, VA and a regional headquarters and distribution center in nearby Spotsylvania County. With the promise of creating 700 jobs, Lidl earned incentives from Virginia as part of the deal.
Part of Schwarz Group, the largest retailer in Europe, Lidl currently operates nearly 10,000 stores in 26 countries throughout Europe. Rumors surfaced in 2013 concerning Lidl’s potential U.S. expansion. A spokesperson told The Washington Post stores will open no later than 2018. Brendan Proctor, who formerly ran Lidl’s Ireland region, will lead the U.S. effort.
"Our philosophy is simple: we are focused on offering customers top quality products at the most competitive pricing in convenient locations," said Mr. Proctor in a statement. "We plan to build on the foundation that has made Lidl so successful in Europe, while creating a unique experience for American consumers that will be unlike anything else in the market."
Aldi private label products – Photo: Aldi
Most reports, however, compare Lidl to Aldi with a similar focus on everyday low prices, a narrow range of items, self-serve departments, expansive private labels and some national brands.
Aldi, which already has 1,400 U.S. stores, is entering California as part of a five-year strategic plan to open 650 new stores across the nation. It expects to have nearly 2,000 by 2018.
"At Aldi, we firmly believe that amazing quality can be affordable, and we are excited to bring our small-format, convenient grocery shopping experience to Southern California," said Jason Hart, CEO, Aldi, in a statement.
In the U.K., Aldi and Lidl have been gaining significant market share against the "big four" — Tesco, Asda, Sainsbury’s and Morrisons — over the last three years. Moody’s predicted last week that Aldi and Lidl’s combined U.K share will reach 12 percent to 15 percent by 2020.
"These discounters are increasingly classless," Richard Hyman, an independent retail analyst, told This Is Money last week. "It’s now cool to shop in a savvy way — Aldi and Lidl are perfect outlets for that trend."
- Lidl Prepares for U.S. Expansion – The Wall Street Journal (sub. required)
- Governor McAuliffe Announces 700 New Jobs in Arlington and Spotsylvania Counties Following Meeting in Neckarsulm, Germany – Virginia Governor Terry McAuliffe
- Lidl confirms U.S. expansion – Supermarket News
- McAuliffe bags German grocer Lidl, bringing hundreds of jobs to Virginia – The Washington Post (tiered sub.)
- Aldi, Lidl confirm U.S. expansions – The Packer
- Aldi to Open First California Stores in March 2016 – Aldi
- Aldi snaps at heels of Britain’s top five supermarkets as retail experts blame ‘snooty’ retailers for underestimating the newcomer – This Is Money
- Announcement: Moody’s: Big Four UK grocery retailers’ margin recovery unlikely before fiscal year 2016/17 – Moody’s
Do you see large expansion opportunities for both Aldi and Lidl in the U.S.? How should traditional grocers respond to the aggressive expansion by limited-assortment grocers? Do you have any insights into Lidl’s strengths and weaknesses versus Aldi?