Lidl's U.S. arrival taking early aim at retail behemoth Wal-Mart

Dive Brief:

  • When plotting locations of 20 Lidl stores opening this summer on maps, staff at Supermarket News discovered one common neighbor: Wal-Mart.
  • The new stores also are close to other groceries, with some moving in close to Food Lion, Aldi and Target locations.
  • According to Supermarket News, long-established discounter Aldi generally prefers to locate itself near Wal-Mart. 

Dive Insight:

At a media event this week, Lidl executives demurred when they were asked specifically which U.S. grocery stores they were competing with, or what their strategy for individual competitors were. Instead, they said Lidl will be unique with its combination of high quality, low prices and fresh products.

However, from these locations, it looks like Lidl is setting itself up for some head-to-head competition with some of the giants in U.S. grocery. Lidl US CEO Brendan Procter said this week Lidl purchased all of its store sights outright and was beginning development from the ground up. It is not moving into any abandoned former grocery or big-box stores. This way, the retailer can customize exactly what it wants in a facility. And it also shows it used its own analysis to determine the best locations available.

Locations near existing stores will help build exposure for a new player on the grocery scene, which is important to build shopper curiosity. However, real estate advisers are not all impressed. Two real estate experts from MTN Retail Advisers told Supermarket News they believed 70% of the sites chosen by Lidl will be difficult to access, finding it hard to draw the volume and demographics that the new retailer wants.

However, experts say the best place for a new retailer to be is close to competition. After all, the competitors already found success in that location, so it makes sense to piggyback on their research — and work to bring shoppers there. It also shows a new retailer doesn't fear the competition, which has been a hallmark of Lidl's expansion push worldwide.

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Filed Under: Grocery Corporate
Top image credit: Mateusz Giełczyński