See you a Lidl, raise you an Aldi.
Just as Lidl is launching in the US on June 15, rival German discount grocer Aldi is shoring up its US footprint. Lidl is making its US debut with 10 stores initially, while Aldi has unveiled plans for further expansion of its US footprint with an investment of $5 billion to open nearly 900 new stores and remodel hundreds of its existing stores across the country.
— LidlUS (@LidlUS) June 12, 2017
US expansion has become table stakes for the German grocers that are targeting American consumers in an unprecedented way with their formulae of limited selection, low prices and heavy use of private labels. The two chains are successful in Europe, where consumers have embraced private labels more than in the US.
The growing German retail presence challenges American chains including Walmart, Target and Kroger, as well as dozens of other big national and regional chains. They’ve been adjusting to changing American tastes and pocketbooks by offering more organic items and, yes, more private labels.
— LidlUS (@LidlUS) June 7, 2017
Aldi and Lidl are expanding as traditional US brick-and-mortar retailers are floundering, struggling to compete with the likes of Amazon, other digital-first retailers and online grocery delivery services. “It should absolutely be more than scary to traditional grocers and retailers,” Mikey Vu, a partner in Bain consultants’ retail practice, told the Wall Street Journal.
The stakes are high. Americans are spending $770 billion on groceries every year, with 52 million US consumers already grocery shopping online, and 20 million planning to increase their online grocery-shopping activity in the next six months. Online grocery sales are forecast to be a $100 billion business by 2025, according to MarketWatch.
Aldi plans to expand to 2,500 locations by the end of 2022, which would make it the third-biggest US grocery chain by current store count levels. Aldi is nearing the end of a $3 billion investment that it announced in 2013 to expand to 2,000 stores by the end of 2018. It has 1,600 stores today, most of which Aldi plans to remodel.
“We pioneered a grocery model built around value, convenience, quality and selection and now Aldi is one of America’s favorite and fastest-growing reatilers,” Aldi US CEO Jason Hart stated. “We’re growing at a time when other retailers are estruggling. 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.”
Lidl, with a mobile truck and hashtag (#rethinkgrocery), is excited to bring its brand to America and offer more choices.
“We are excited to open our first stores in the United States,” said Brendan Proctor, President and CEO of Lidl US, in a press release.
“Lidl is grocery shopping refreshed, retooled and rethought to make life better for all our customers. From our selection of sustainable products like our certified fresh and frozen seafood to top-quality wines from around the world available at market-beating prices, our team puts extra effort and attention into each product we put on our shelves. When customers shop at Lidl, they will experience less complexity, lower prices, better choices and greater confidence.”