Lidl Opens to Big Crowds At Initial 10 Stores; Aldi To Spend $3.4 Billion, Add 900 Units By 2022
The hype is over and the hoopla began on June 15 when Lidl opened the first 10 of what is expected to be more than 100 stores in the Mid-Atlantic and Southeast during the next six months.
The initial group of stores – located in Virginia Beach, VA; Hampton, VA; Kinston, NC; Greenville, NC; Sanford, NC; Wilson, NC; Rocky Mount, NC; Winston-Salem, NC; Spartanburg, SC; and Greenville, SC – all were reported to be extremely busy through the first weekend of business, as the German-based discounter which maintains its U.S. headquarters in Arlington, VA, concluded its four-day grand opening sale.
In the next few weeks, Lidl will open an additional 10 stores in Culpeper, VA; Chesapeake, VA; Norfolk, VA; Newport News; two in Richmond, VA (West Broad Street and S. Laburnum Avenue); N. Chesterfield, VA; Havelock, NC; Rockingham, NC; and Wake Forest, NC. All 20 stores that will open during the company’s debut period will be supplied from two distribution centers in Fredericksburg, VA and Mebane, NC. A third warehouse, located in Elkton, MD, is still under construction and will service new Lidl stores in Maryland, Delaware, Pennsylvania and New Jersey.
When it developed its U.S. strategy more than three years ago, the division of the Schwarz Gruppe elected to acquire all of its U.S. real estate. That’s an expensive proposition, and one which gave Lidl full control of its sites, but in many cases, prevented the company from gaining the best locations in many market areas it will enter.
However, opening day crowds proved that customers will travel for a discount and the stores’ 36,000 square foot footprint (about 21,000 square feet of selling space) covering six aisles offer a variety of mainly private label items in grocery, frozen and refrigerated. Also featured are fresh bakery items and pre-packaged meat, deli and seafood selections. The Lidl U.S. stores also offer a limited selection of small kitchen appliances, outdoor furniture and toys. The two Virginia stores that opened on June 15 also featured wine departments.
Lidl’s chief competitor in Germany and in other parts of Europe, Aldi, already has a 40-year head start on what should prove to be a fierce rivalry in the U.S. During the past year, Aldi unveiled a new larger prototype (featuring more perishables) and expanded into California. It currently operates approximately 1,600 stores in 35 states in this country and has set the standard when it comes to small-format discounting.
Three days before Lidl’s debut, Aldi announced that it will invest $3.4 billion by 2022 to expand its U.S. presence. That would give the Batavia, IL based merchant approximately 2,500 locations making it the country’s second largest food retailer – following Wal-Mart – in terms of store count. The aggressive expansion effort is also expected to add about 25,000 new jobs.
Aldi is in the last phase of its five-year $3 billion investment to reach 2,000 units by the end of next year and is spending an additional $1.6 billion to remodel 1,300 existing stores by 2020.
“We pioneered a grocery model built around value, convenience, quality and selection and now Aldi is one of America’s favorite and fastest growing retailers,” said Aldi U.S. CEO Jason Hart. “We’re growing at a time when other retailers are struggling. We are giving our customers what they want, which is more organic produce, antibiotic-free meats and fresh healthier options across the store, all at unmatched prices up to 50 percent lower than traditional grocery stores. We have passionate fans who know Aldi offers a smarter way to feed their families in a modern, convenient and easy-to-shop environment.”