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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.