Lidl Aggressively Pursuing Sites; Buys HQ Building In Arlington, VA

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Lidl, the large European limited assortment retailer which has aggressively set designs to enter the U.S. market by 2018, may be accelerating its pace, based on recent moves. Germany-based The Schwarz Group, which owns the large discount merchant, has been aggressively seeking new sites in the Mid-Atlantic market and ,according to the Washington Business Journal, has acquired the majority of the space in a nine-story office building in Arlington, VA through its U.S. operating arm, MGP Retail Consulting LLC. The property, called National Gateway I, located at Clark Street (near Potomac Yard), is reportedly 217,000 square feet in size and includes a food lab and test kitchen. Cost for the property, according to reports, was $56.6 million, and ,according to the Business Journal story, ArlingtonCounty issued permits for an interior build-out of the property on April 1.

Real estate executives from the supermarket business as well as developers and brokers have told us that, for at least nine months, Lidl has been aggressively targeting sites in Baltimore-Washington, Philadelphia, Pittsburgh, Richmond, Norfolk, Charlotte, NC and the Raleigh-Durham-Chapel Hill area of North Carolina, and sources have told us that Lidl plans to have about 100 sites secured by the time it is ready to officially open its first U.S. store.

About 60 miles west of Raleigh sits Alamance County. The Triangle Business Journal reported earlier this month that Lidl is considering building a distribution center in the new 1,200-acre NC Commerce Park in Hawfields, NC at the intersection of I-85 and I-40. Wal-Mart is also considering constructing a 450,000 square foot depot in that same development. Lidl is also reportedly investigating a site in the Aberdeen, MD area for another distribution center.

Unlike its model in Europe, where Lidl operates in 26 countries, and stores average about 10,000 square feet, multiple sources say that Lidl is looking at footprints in the 25,000-30,000 square foot range resembling a U.S. Aldi store, Lidl’s chief rival in Europe.

Eighteen months ago we reported that Lidl’s U.S. expansion effort is being led by executives from its Irish division. Since that initial disclosure, the company has hired more than a dozen real estate executives under its MGP Retail arm to seek out sites. More recently it has used LinkedIn to find meat, dairy and produce buyers.

With more than 10,000 stores, Lidl’s annual sales are approximately $100 billion and it ranks as Europe’s third largest food retailer, trailing only Carrefour and Tesco, and ahead of what will surely be its largest U.S. rival Aldi, which operates in 15 European countries and operates approximately 7,600 smallish European stores and an additional 1,300 U.S. stores which average about 18,000 square feet in size.

In addition to its forthcoming U.S. expansion, according to published reports, Lidl also plans to enter Lithuania, Serbia and Australia this year and Russia and Morocco in the near future.

Lidl company officials would not respond directly to questions, however the company did offer a prepared statement: “As has been reported, Lidl is in the early stages of preparation to operate in the United States,” the statement read in part. “We are taking steps toward that effort. However, we are not able to comment on any particular transaction at this time.”