One week after its CEO resigned due to strategic differences, Lidl announced it will be opening its first 20 U.S. supermarkets in Summer 2017 — putting American grocers on notice. The German no-frills grocery chain is ahead of schedule, originally planning to open its first batch of U.S. stores no later than 2018.
The 20 stores will open in North Carolina, South Carolina and Virginia, where the company established its first U.S. headquarters in 2015. The supermarket chain has plans to open 100 stores along the East Coast by mid-2018, and as many as 600 throughout the U.S., according to a presentation obtained by Business Insider.
Major U.S. grocers have a reason to feel threatened by Lidl’s American entrance. Lidl can offer low-price merchandise and minimalistic service experiences due to a business model that emphasizes:
A limited fresh foods assortment focused primarily on private label;
Locally-produced and seasonal goods; and
Minimal focus on store investment, with limited labor and minimal assistance required.
With the expansion, Lidl ups the ante on its rivalry with German grocer Aldi, which now has more than 1,600 stores in the U.S. and plans to open another 600 within the next couple of years. Earlier this month, Aldi announced it would spend $1.6 billion on remodeling more than 1,300 of these stores to compete with natural foods chains such as Whole Foods and Trader Joe’s.
Lidl's U.S. stores are expected to be between 30,000 and 36,000 square feet, which is about twice as large as an Aldi store, but smaller than a traditional supermarket.