“Lidl is still a danger for the U.S. (grocery) market.”
That’s the statement made by Sebastian Rennack, a retail analyst at Aletos Advisory in Germany, in response to Lidl’s decision last month to layoff 200 U.S. corporate employees. The company’s geographical penetration in the U.S. is low, he says, because the locations were not well chosen and the American customer doesn’t know Lidl very well.
However, he noted that Lidl is an agile retailer with the resources and patience it needs to eventually find its way in the U.S.
“Lidl takes a long time, and that is something that the American grocers should not forget,” he said.
Lidl currently operates about 170 stores in nine East Coast states and Washington, D.C., and recently spent $145 million on property for a future distribution center outside Philadelphia.
Maxime Delacour, who follows Lidl for IGD in Canada, pointed out that the grocer has a history of entering markets where they had little or no presence and gradually emerging as a substantial force.
“If you look at Lidl in France or in the U.K. or in Spain, the first five to 10 years, you barely heard about them. They were growing of course but not seen as massive, major competitors,” Delacour said. “And after probably 10 to 15 years, depending really on the market, they started to be very competitive, and now in some markets, they’re leading and disrupting.”