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October 17, 2025
Could Lidl Eventually Be Squeezed Out of the US Grocery Market?
In a detailed review of breakdown of Lidl’s recent successes, failures, and future goals, Modern Retail’s Mitchell Parton also took the time to highlight comments made by Lidl U.S. CEO Joel Rampoldt in a recent interview.
The verdict, according to Rampoldt: Lidl is committed to building out its American footprint on a modest growth path, seeking to solidify its proposition and commercial offering before pushing harder.
The question, however: Can Lidl stave off more established competitors on all fronts, from Trader Joe’s and the explosive growth of Aldi on one side to Walmart and Costco on the other — not to mention other players, such as Sprouts?
Lidl Embarking on a Tame But Seemingly Considered Growth Plan
Despite opening its first U.S. stores in 2017, Lidl has a store count of just under 200 as of this writing. Plans are for the grocery chain to open four in October; yet, that number is dwarfed by the 800 stores competitor Aldi is slated to open over the next few years to come.
Since opening, Lidl U.S. has changed up its CEO five times, with Rampoldt taking the helm in August 2023. In March of the following year, four new executives took their seats in the C-suite, just one year after approximately 200 workers stateside were relieved of their positions. In short, it’s been a turbulent ride for U.S. operations.
“We’re growing at what I would consider to be a modest pace for now, because we want to make sure the business is stable and operating exactly the way we want it,” Rampoldt said during remarks made at Groceryshop this year, in Las Vegas. “We want to make sure we have our operations and our commercial offering really locked down before we turn up the heat on growth, but we’re growing and we’ll continue to do so.”
With Lidl enjoying only a very slim 1% market share in its trade areas, as Parton noted based on Rampoldt’s figures, the company is trying to maintain its edge on pricing competitiveness, assortment, and product quality — despite having shelved a number of its SKUs to provide more of a quality promise, and on price going up against low-price leaders like Walmart and Aldi.
“We know who we are, and we want to be who we are and not let ourselves be nudged into adding products that we really don’t need because we see someone else carries it,” Rampoldt told the outlet.
“If competitors are moving up on price, we want to be very careful about that, because we want to be the lowest price in the market. We want to maintain downward pressure on price,” he added.
Brand Identity, Private Label Key to Lidl’s Differentiation Play
Speaking at Groceryshop prior to Sprouts Farmers Market CEO Jack Sinclair, Rampoldt offered praise to Sprouts for “knowing who they are and not trying to be anything else,” as well as in targeting a very specific niche of grocery shopper and locking in on that spend — cornerstones Lidl’s strategy also notably rests upon.
“[Sinclair] could pick up so many sales by putting things into his store that customers would buy, but that would cause them to start to drift from who they are… I really admire their discipline,” Rampoldt remarked.
With Lidl having slashed its assortment from approximately 4,500 SKUs to about 3,250 currently, and with the CEO signaling that product choice was more important than having a wide-ranging inventory, Rampoldt further drew the line in stating that his view of a successful future for the company relied on consumer awareness of their private label strength.
One example given: Lidl’s Bon Gelati ice cream, versus the well-known Magnum treat from Unilever.
“In ice cream, when you’re talking about quality, you’re talking about percentage of fat in the ice cream — the fattier it is, the better it tastes — the thickness of the coating, the chocolate around the ice cream,” Rampoldt said.
“What we’ve done is we’ve listed their product, and we have it side by side with our product on the shelf — basically saying, not in these words, but, ‘Magnum is a great product, and we have it at a great price; we also have our product, which is phenomenal, and you should consider it equivalent at roughly half the cost,’” he added.
Discussion Questions
What is the likelihood that Lidl will be able to succeed in the U.S. grocery market in the long term, in your opinion? Facing direct competition from so many sources and on a number of fronts, what will it need to do to truly capture dedicated spend?
Is it enough for Lidl to rely on its smaller store footprints, selective choice in locations, and private label appeal? If not, what marketing or operational efforts can it make to stand out as a grocery destination?
Is Lidl’s private label play impressive enough to draw spotlight, particularly as store brands proliferate? Why or why not?
Poll
Loading …BrainTrust
Perry Kramer
Managing Partner, Retail Consulting Partners
Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
Jeff Sward
Founding Partner, Merchandising Metrics
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While Lidl has not had the success of Aldi, there is no current reason to assume it will be squeezed out – especially as it continues to earmark new locations for expansion. That said, part of the reason Lidl has struggled to replicate the success of Aldi is that it doesn’t have as clear a point of differentiation. Aldi combines low prices with quality and an innovative own label selection. Lidl is more focused on low price without many other frills. In a market already dominated by low-price players, that’s not enough to move the dial in a significant way. The company seems to be learning and adapting, but it will take time for this to filter into brand perception.
It’s easier to identify the challenges they face, and the strengths they have , than to give specific odds: under the former is the basic compeitiveness of grocery, and the fact that they’re currently dwarfed – a telling, but accurate term – by their most obvious competitor (even establishing an identity can be a challenge); under the latter, it should be remembered that they’re not some startup, but rather the US branch of a larger – and successful – foreign retailer. Putting the two together, I think it’s fair to say they will probably never be forced to exit the market, but it’s certainly possible they may choose to do so.
In the US Lidl is drifting relative to its competitors. Without a near term change, this will lead to store count stagnation followed by a graceful sell off/exit. As Nicholas noted, Lidl is similar to Aldi in both quality, SKU count, and private label product approach. The lack of a differentiating value proposition from the very competitive, (and efficient) set of established traditional grocers, Aldi, Super Centers, and clubs will continue to make it difficult to gain market share in the US. Without a more unique an compelling value proposition and identity the writing is on the wall.
Lidl’s long-term success in the U.S. grocery market remains uncertain. While its smaller store format, curated assortment, and private label strength mirror what has made it successful in Europe, the U.S. market is far more competitive and entrenched. With discounters like Aldi, value-driven giants like Walmart, and warehouse players like Costco all competing for price-sensitive consumers, Lidl must do more than replicate its European model. To capture dedicated spend, it needs to establish a clear brand identity that resonates with American shoppers—one built on freshness, quality, and community relevance rather than just low prices.
Its private label program is a strong foundation, offering solid margins and quality control, but it’s no longer a differentiator. Store brands are now ubiquitous, with Kroger, Target, and Walmart elevating their private labels into lifestyle brands. For Lidl to stand out, its private label must feel distinctive—positioned as aspirational yet affordable, not merely budget-friendly.
Ultimately, Lidl’s path forward requires sharper localization, stronger marketing, and a more emotionally resonant brand story. By enhancing its fresh food departments, tailoring assortments to local tastes, and communicating consistent value beyond price, Lidl can build the loyalty it needs to move from niche player to mainstream contender in the U.S. grocery landscape.
Despite Lidl’s lack of differentiation, it’s unlikely to be forced out of the US grocery market—but that may be the problem. Lidl is solving a problem most American shoppers don’t have. Unlike European consumers who’ve grown up with limited-assortment discounters as the norm, Americans have been conditioned by decades of abundance. The SKU reduction from 4,500 to 3,250 might streamline operations. Still, it also removes the discovery moments that drive repeat visits while further positioning the company in direct competition with Walmart and Aldi on price—a battle it cannot win.
With only 1% market share after eight years and five CEO changes, the data suggests Lidl U.S. isn’t failing; it’s simply irrelevant. The company faces two viable strategic options: Go hyper-regional, dominating 2-3 metro areas with genuine localization and European product curation, foregoing national expansion for density and differentiation. Or pivot the value proposition entirely to become an “international discovery store” where private label celebrates European heritage rather than hiding behind side-by-side comparisons with name brands.
Lidl’s disciplined approach lacks distinction, and discipline without distinction isn’t strategy, it’s rigidity masquerading as conviction.
Will Lidl be squeezed out, or was it a bad decision to even jump into the market? Was there really ever a market share opportunity? Based on what weakness in which chains? Feels like the same logic could have supported launching a new department store back in the 80’s or 90’s. Sure, big robust market but that doesn’t mean customers were clamoring for yet another choice. “If you build it, they will come” worked great…until it didnt.
If Lidl’s format and private label focus wasn’t strong enough (in the U.S.) to make it very relevant during the economic challenges of the last few years, not sure it will get there.