Lidl to accelerate pace of store openings in September
- Lidl opened its 54th store this week in Indian Trail, North Carolina and plans to open three stores next month, according to the company. These include two D.C. area stores — one in Bowie, Maryland, which will open on September 12; the other in Dumfries, Virginia, which opens September 26 — along with a store in Concord, North Carolina, opening September 19 . The Bowie location will be the discounter’s first store in Maryland.
- A company spokeswoman declined to elaborate on the company’s growth plans, but said it intends to open more stores in Maryland. “We are working on building out our store network in the state and that starts with our store in Bowie,” she told Food Dive.
- Lidl initially planned to open 100 locations by June of this year, but has had to slow its growth plans due to underperforming sales, reports note. The company has pulled out of store projects in several states, including Virginia, New Jersey and Alabama.
After opening nearly 50 stores in 2017, Lidl has slammed on the breaks this year, with just a few openings over the past eight months. It’s hard to tell when and if the company will ramp up expansion once again, but regardless, it’s clear Lidl is going through an adjustment period.
Lidl’s first year in the U.S. was a humbling one, with reports indicating slow traffic and a failure to nab customers away from incumbent grocers. The problems were numerous, according to analysts: The stores were too big, the site selection was poor and it wasn’t promoting the right products. Everything seemed to come to a head back in January, when Klaus Gehrig, CEO of the Schwarz Group, told a German publication its U.S. venture was a “disaster.”
“What went wrong at Lidl when it entered the U.S.? The answer is simple: nearly everything,” wrote Brittain Ladd, an industry advisor and former Amazon executive, in a recent Forbes column.
Lidl, which has always emphasized its ability to react quickly, has adjusted its operations and promotional strategy. In May, it brought in a new CEO, Johannes Fieber, who previously led the company’s Sweden division. It’s also developing smaller stores that are more in line with its European format to complement its 36,000-square-foot U.S. prototype.
On the promotional side, private-label heavy Lidl has put more emphasis on national brands in some of its recent circulars. It also launched an ad campaign earlier this year and has changed the frequency of weekly promotions on some of its products, including fresh foods and general merchandise. During a recent store tour, a spokesman for the company told Food Dive that, despite skepticism towards Lidl’s wide selection of nonfood products, the category is actually doing quite well.
There’s time for Lidl to improve its fortunes — but it needs to move fast. Grocers up and down the East Coast are remodeling stores, honing their promotions and launching online grocery services. Meanwhile, close competitor Aldi just announced plans to rotate scores of new products into its stores as it continues to expand and update its footprint.
Some industry analysts remain bullish on Lidl’s prospects in the U.S. A consumer survey by Oliver Wyman earlier this year found that Lidl inspires considerable loyalty among regular customers. Nearly half of Lidl shoppers surveyed by the firm said they visit their local store at least twice a month, while 61% of those under age 45 said they visited Lidl multiple times a month. More than half of these younger shoppers — 53% — spend $50 or more every time they go to Lidl, the study found.
Meanwhile, consulting firm Brick Meets Click reported earlier this summer that consumers are coming around to Lidl’s price-meets-value proposition and are increasingly likely to recommend the discounter to others. To improve its footing in the U.S., the firm noted, Lidl needs to keep its prices low, improve its image as a convenience retailer, and drive trial of its many private label products.
“Lidl needs to drive traffic. They need to get more people into their stores,” Bill Bishop, Brick Meets Click’s chief architect, recently told Food Dive.
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