Lidl Makes Its Move on America

Churchill and the RAF weren’t available to head off this German invasion. The proliferation of German discount grocers Aldi and Lidl in the U.K. over the past decade carved out a new battlefield for Tesco, Sainsbury’s, Asda, and Morrisons, and they are still mired in the mud. Second-quarter results released by market researcher Kantar showed the Germans growing 19% over last year, while the British Big Four edged up less than 2%.

Now the threat is aimed at America, with Lidl moving into retail centers with guns blazing. (Aldi has had a U.S. presence for 40 years.) From an Arlington, Va., headquarters established just two years ago, Lidl is directing a 100-store assault on the East Coast scheduled to conclude in a year’s time. Next, it plans to cut a swath from Texas to Ohio. Aldi has been its direct competitor in Europe and is likely to be here, as well. Considering that Aldi has 1,600 U.S. stores, figure Lidl to end up with upwards of 2,000 locations.

Lidl’s go-to market strategy includes low, low prices. And some suggest it leans more toward Trader Joe’s (also owned by Aldi) than Aldi.

“No one knows whom they will be competing against until they’re out in the marketplace,” Phillips Edison & Company CEO Jeff Edison said. “History says Aldi, but if they are able to create a Trader Joe’s type of brand, they may display a different thought process.”

Time will tell, but the battle will be enjoined, no matter what. “When you look at Walmart, Kroger, Safeway, and Albertsons, these are not companies that are going to sit around and let Lidl walk in,” Edison said.