2 German Discount Grocers Stage U.S. Invasions
By Greg Lindenberg on Jun. 12, 2017BATAVIA, Ill. -- German grocers are planning a U.S. retail blitzkrieg.
Medium-footprint discount grocery chains Lidl and Aldi both have launched major initiatives to shake up the U.S. market, with ripples that could reach the shores of the convenience-store industry.
On an accelerated schedule, Lidl will open its first discount grocery stores in the United States on June 15. The company will open 20 of a planned 100 total U.S. stores during summer 2017.
And in a move that may, in part, be intended as an answer to Lidl’s arrival in America, Aldi is undertaking a major expansion of its store base to complement an existing store remodeling program.
Both chains emphasize convenience and low prices as part of their consumer appeal, seeking to siphon off customers from other retail channels, including grocery (including Wal-Mart), convenience and dollar stores.
Click through for more details on the initiatives. …
A lot by Lidl
By summer 2018, Lidl plans to open up to 100 stores across the East Coast from its U.S. base of operations in Arlington, Va., creating a total of 5,000 U.S. jobs.
All Lidl stores will be newly constructed facilities, featuring what the company calls “a manageable, easy-to-shop” six-aisle layout.
The company said “shoppers can expect to get top-quality goods and groceries at up to 50% less than other supermarkets in the United States.”
Lidl released a list of 20 stores that will open in Virginia, North Carolina and South Carolina during summer 2017. The first stores will open in Kinston, Greenville, Wilson, Sanford, Rocky Mount, Winston-Salem, Havelock, Rockingham and Wake Forest, N.C.; Spartanburg and Greenville, S.C.; and Virginia Beach, Hampton, Culpeper, Chesapeake, Norfolk, Newport News, North Chesterfield and Richmond, Va., which will be home to two stores.
Based in Neckarsulm, Germany, Lidl operates about 10,000 stores in 27 countries.
All about Aldi
In a move that may, in part, be intended as an answer to Lidl’s arrival in America, Aldi is investing $3.4 billion to expand its base by approximately 900 locations to 2,500 stores nationwide by the end of 2022, building on its $1.6 billion program to remodel 1,300 stores by 2020. The Essen, Germany-based chain, with U.S. headquarters in Batavia, Ill., operates more than 1,600 U.S. stores in 35 states. It has approximately 10,000 stores in 18 countries.
With this growth, Aldi will be the third largest U.S. grocer by store count and serve 100 million customers per month, the company said, and it will add approximately 25,000 new jobs in stores, warehouses and offices.
Wal-Mart Stores Inc., the largest U.S. grocer, is testing lower prices in 11 U.S. states and pushing vendors to undercut rivals by 15%, according to a Bloomberg report. Bentonville, Ark.-based Wal-Mart, the world's biggest retailer, is expected to spend about $6 billion to regain its title as the low-price leader, analysts told the news agency.
Aldi evolves
"We pioneered a grocery model built around value, convenience, quality and selection, and now Aldi is one of America's favorite and fastest growing retailers," said Jason Hart, CEO. "We're growing at a time when other retailers are struggling. We are giving our customers what they want, which is more organic produce, antibiotic-free meats and fresh healthier options across the store, all at unmatched prices up to 50% lower than traditional grocery stores."
Aldi sells the most frequently purchased grocery and household items, primarily under its exclusive brands.
The company said it has continued to evolve its selection of products to include more fresh foods and gluten-free options throughout the store. Aldi also continues to increase its offering of fresh and sustainable seafood, specialty wines and cheeses, organic items from its SimplyNature line and baby products from its Little Journey line. All of Aldi’s exclusive products are free of certified synthetic colors, added trans fat and added MSG.
"We have passionate fans who know Aldi offers a smarter way to feed their families in a modern, convenient and easy-to-shop environment," Hart said.