Lidl Opened Its First U.S. Stores Last Week – How Is it Going?

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German Discounter Plans to Completely Disrupt the U.S. Market

Last week, German discount chain Lidl opened its first U.S. stores in North and South Carolina and Virginia. Amid a ton of market-disrupting news, including Aldi’s latest investment and Amazon’s acquisition of Whole Foods, the effects of this new horse in the race for your dollars seems especially significant. Here’s a run-down of Lidl’s first week and what we can expect in the coming months.

Opening Day Was Frenzied, but Successful

While there are no official reports from the company, by all accounts consumers were eager to try out Lidl stores. Hundreds lined the streets outside the Virginia Beach location prior to opening according to Business Insider. Reporting for Supermarket News, New York native Jon Springer also attended Lidl’s opening day in Virginia Beach. He traveled to several stores in the area that day, including Kroger, Aldi, and Food Lion and immediately noticed the excitement surrounding Lidl. This included a full parking lot and prices he’d never see in New York.

Springer reports that, by the end of the day, “despite what officials said were 50 to 60 employees on hand…the store looked extremely shopped, emptying produce boxes were droopy, but 11 checkout lines were still ringing up orders.”

Competitors Are Welcoming Lidl – For Now

Another big news item surrounding Lidl this week actually came from the CFO of Kroger, Mike Schlotman. While presenting at the Oppenheimer Consumer Conference in Boston on Wednesday, Schlotman expressed relief regarding Lidl’s new stores. According to Schlotman, Kroger has spent considerable time “getting ready” for the Lidl invasion of their market. Now, the company is anxious to see if their plans are enough. Schulman explains:

I’m glad [Lidl] stores are now open, and we can stop talking about what we’ve been doing to get ready and see if what we’ve done to get ready [is adequate]. We’re going to work against them just like we would with any competitor that winds up opening. Even if it’s a new Safeway across the street, you do something to combat that competitive threat.

It Appears Their Prices ARE Lower

Because so much of the Lidl image focuses on discounts, Jefferies Analysts set out to see how they stacked up now that the doors are open. The results, according to Business Insider, are pretty astounding.

Lidl is about 9% cheaper than Walmart, according to a price check on a basket of 20 items.

In addition, they found that Lidl was 3% cheaper than main German competitor Aldi and 16% cheaper than Food Lion. This is especially significant because of the influx of Lidl and Aldi stores in the UK. There, traditional retailers have engaged in price wars that they cannot win.

The Lidl Model Is Like “Aldi for Millennials”

One of the most noticeable features of Lidl’s first 10 locations is immediately obvious: its architecture. As promotional images depict, the large glass front and bold, bright colors of these storefronts are, indeed, captivating consumers. Plus, this design continues inside the store as well. Features such as natural wood accents and treated concrete floors represent the design tastes of the younger generation (Millennials). In addition, features such as fresh based goods, sample stations, and organic/natural options all speak directly to Lidl’s target market.

While Millennial shoppers are arguably behind the growth of both German discounters, the design choices of Lidl still matter. As Springer pointed out during his pre-opening tour, “The pricing signage is just a little louder, the floor space—and head space—just a little more open, than at Aldi, and a waft of aroma from the bakery didn’t hurt the atmosphere.” All of this, he and others conclude, is set to draw in young people looking for a hipper way to save.

Are You Ready for Lidl?

Lidl’s initial growth phase includes opening at least 100 stores over the next year. They are already putting up good numbers in the southeastern region and have plans to expand to neighboring states such as Maryland and New Jersey soon. In addition, there are reports of Lidl opening in Texas as well.

Whether or not their impact will be as big here as it is across the Atlantic, or as big in other regions as it is in the southeast, remains to be seen. However, for those within a short drive of the new Lidl locations, the prospect of discounted shopping changed dramatically this week.

Have you gone to Lidl yet?