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Lidl Blocks Kroger Attempt To Stop Sales Of Private Label Items; Trial Set For January

A federal judge in Richmond has denied Kroger’s injunction request for new market entry Lidl to stop selling items in its “Preferred Selection” brand. Kroger originally filed suit early last month, claiming that the German-owned discounter’s private label name too closely resembled its own “Private Selection” label.

Kroger asserted that the close resemblance of the names would cause confusion for customers and allow Lidl to compete unfairly with Kroger because customers could assume that the two brands are associated with one another.

However, late last month in Richmond, VA, U.S. District Judge John A. Gibney Jr. ruled that the logos look “somewhat alike” but said “private” and “preferred” have different meanings. In a response to the lawsuit, Lidl accused Kroger of trying to thwart its U.S. debut.

“I think the public interest lies in competition,” Gibney stated in court. “I don’t find they have an identical or similar meaning.”

In its counter-filing, Lidl stated: “Kroger is using this lawsuit to try to: disrupt the on-going launch of a new, emerging competitor that offers consumers high-quality products at far lower prices; distract from the positive reviews garnered by Lidl’s launch by painting Lidl as a copycat – when in fact Lidl is a decidedly different and (better) grocery experience; and drive up Lidl’s costs by having to defend against Kroger’s spurious claims.”

Judge Gibney set a January 11 date for a bench trial on the matte You can be assured that Kroger will be dogged in trying to defend its “Private Selection” trademark and other retailers have already begun to defend their turf more aggressively now that they’ve got a feel of Lidl’s operating style and go-to-market approach.

As for more current events concerning Lidl, four more Richmond area stores debuted on July 27, giving the most hyped new grocery entry in the last decade 18 stores now open. All stores are being serviced from the discounter’s Fredericksburg, VA-area facility.

We’re told that it should shortly start supplying other Lidl stores in the Carolinas from another DC in Mebane, NC. The company’s third distribution center located in Cecil County, MD should be completed by the end of this year. A fourth depot has recently been announced for Cartersville, GA which is slated to open in late 2018.

Once the Cecil County facility is finished, it is expected to begin supplying the first of about 50 Lidl stores that are planned for Pennsylvania, New Jersey and Delaware.

Our field sources noted that there’s still a wide variance of weekly volumes (measured from at least two weeks after a new store debuts) in all 18 stores that are currently open. Estimates range from about $230-$320K per week.

As previously noted, one thing to watch for when Lidl opens in Pennsylvania, New Jersey and Delaware (Maryland, too) is that those states do not allow wine and beer sales in grocery stores. It’s clear that the company’s wine department (as well as its bakery) is a key sales driver in its marketing strategy.

Lidl plans on having about 100 stores open by June 2018 in the New Jersey-to-Georgia corridor and recently set up a field office in suburban Dallas, TX where it reportedly has about 11 sites initially targeted.