A German grocery
chain that crippled its rivals in the UK is about to invade the US
September 18, 2016
A new wave of
European grocery stores is about to invade the US.
The German
supermarket chain Lidl is gearing up to open stores in dozens of cities along
the East Coast, spanning from New Jersey to Georgia, the company told Business
Insider.
Lidl
wouldn't reveal how
many stores it's planning to open, but sources told the commercial real-estate
firm CoStar
that the company will open as many as 150 US stores by 2018.
The company
currently has 10,000 stores in 26 European countries.
Lidl
has already snatched
up leases in dozens of US cities, according to local-news reports, and it's seeking
store managers in areas including
Burlington County,
New Jersey;
Richmond, Virginia;
Charlotte and
Raleigh, North Carolina;
Greenville, South
Carolina;
and Augusta,
Georgia.
The chain's US
headquarters is in Arlington, Virginia, and it's building warehouses in Cecil
County, Maryland;
Mebane, North
Carolina;
and
Fredericksburg,
Virginia.
Lidl
and
fellow German
supermarket chain
Aldi — which has
1,300 stores in the US — are best known for their rock-bottom prices.
Both chains rapidly
expanded in the UK over the last several years and completely upended the
country's grocery market, sending its largest supermarket chains into a
crippling price war.
In the most recent
quarter,
both Lidl's and
Aldi's sales skyrocketed, increasing by 13.8% and 11.5%, respectively,
according to data from Kantar Worldpanel.
Meanwhile, sales
declined at the UK's four biggest supermarket chains.
Sales dropped 1.3%
at Tesco, 2.4% at Morrisons, 1.4% at Sainsbury's, and 5.9% at at Asda.
This has been an
ongoing trend for the last several years, with Lidl and Aldi growing their
market share at the expense of the so-called "big four" supermarkets
in the UK.
The biggest reason
for Lidl's success is its cheap prices.
Lidl is the cheapest
supermarket in Britain, according to the Daily
Star.
Lidl's US stores are
expected to be between 30,000 and 36,000 square feet, which is about twice
the size of an Aldi store, but still much smaller than a traditional
supermarket like Kroger, which averages about 165,000 square feet.
Like rival Aldi,
Lidl keeps prices
low by limiting inventory to a lean selection of private-label items, versus
traditional supermarkets that tend to carry several different brands of a
single product.
Lidl also invests
far less in customer service and merchandising than traditional grocers.
Most of the stores'
products are displayed in their shipping cartons to make restocking quick and
easy.
That means fewer
workers are needed on the sales floor.
Lidl additionally
saves money by requiring customers to bring their own shopping bags and bag
their own groceries.
The chain offers a
wider array of merchandise than Aldi.
In addition to
groceries,
Lidl
sells appliances and furniture, and it debuted a women's collection in
August 2014 that sold
out within the first three days.
The collection
included a faux leather jacket costing 14.99 euros 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
1,300 stores in the country, with plans to open another 600 within the next
couple years.