German chain Lidl sets eyes on Virginia, Carolinas

Delaware, Maryland, Pennsylvania, Virginia, and West Virginia. No non-grocery posts.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by mjhale »

I'm in Northern Virginia. All but one of the Aldi stores near me are in strip centers where Aldi took over space from a closed retailer. There is one Aldi store on the east side of Manassas that is in a new build shopping strip where Aldi is in a standalone building. The Aldi stores around me seem to be a hit and are busy especially at peak shopping times. I usually shop at Aldi on Friday evening after work and they routinely have 2-3 registers going continuously.

The question in my mind is what does Lidl bring that is different than anyone else? If Lidl's biggest competition is Aldi what do they bring to change people's routine of shopping at Aldi? There is plenty of grocery competition near me and Lidl is going to have to have something significantly different to bring in the customers. I feel like others on this board that Lidl is coming to the US "just because" and not necessarily with a significant marketing plan. I'll check out Lidl but unless they are significantly different or better I'm not going to change my routines.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by pseudo3d »

From what I've read, they really have no idea what they're doing. They are trying to listen to shoppers by opening slightly larger stores and stores that don't resemble car dealership offices, but their merchandise mix is a total mess.

First up, Lidl is going to try to offer "ultra-low prices on brand names and private label goods", which will be a tough sell for an incoming retailer. Unless Lidl is betting the farm by expecting a loss for the next few years, Kroger and Publix have the buying power that Lidl can't beat, and a few well-timed price-matching events will take the winds out of their sails.

But Lidl in its research found that Americans really don't really like discounters, so they're positioning themselves as a hybrid Trader Joe's/Harris Teeter.
In a presentation seen by Business Insider, Lidl describes itself as a cross between Trader Joe's and Harris Teeter.

'After three years of research we discovered that US consumers don't like discount groceries,' the presentation reads. 'Unlike Aldi, the Lidl will be a hybrid similar to Trader Joe's or Harris Teeter but closer to a Trader Joe's. We will sell high end brands, quality not quantity, best products only.'
Finally, Lidl will add a non-foods department but instead of a competent designed drug store with the quirky vibe that made K&B Drug and Longs Drugs such successes in their native areas, it will be just random stuff that changes from week to week.
As it does elsewhere, Lidl will feature a large section dedicated to non-grocery items. Proctor said that shoppers can expect to see items as diverse as drills, yoga pants and garden lawn mowers in this part of the store, which is to feature a constantly rotating array of items that cycle in about every week. That could be an interesting way for Lidl to differentiate itself in the market, and it could introduce a T.J. Maxx-like “treasure hunt” vibe to the stores.
With this "throw everything at the wall and hope it sticks" approach, either Lidl is going to work for its place in the American market or it's going to get run out faster than you can say "Tesco".
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by mjhale »

Based on the article that was linked in pseudo3d's post Lidl is already sounding like a hot mess to me. A few observations:

- If you are "like" Trader Joes why should I shop your store when I can shop at the real thing... Trader Joes.

- If you think of yourself as "like" Harris Teeter do you also realize that Harris Teeter has a reputation as being ridiculously expensive in a lot of areas. Kind of goes against the whole low price thing.

- "We will sell high end brands, quality not quantity, best products only" sounds a lot like Whole Foods. That worked great until everyone else got into that ball game. Plus there are any number of traditional grocers around the country that sell high end brands and one knows what you getting already at those stores.

- The non-foods department sounds like a flea market to me. I don't "go on the hunt" when I go grocery shopping. Though I will say I like to poke around the "Aldi Finds" section. At least at Aldi those areas go with the season and times plus they have quite a few special foods items lots of which I wish they would carry full time.

- If Americans don't like discounters then explain the crowds at Aldi, Wal-Mart and very competitively priced traditional grocers like Wegmans. What Americans don't like are stores with a lack of focus, poor customer service and no clear reason to shop there.

If Lidl somehow makes a go of it more power to them. If they can't the markets will tell them so. Any way you look at it Lidl will be an interesting study in American retailing by a non-native. I'll be observing first hand as there is a Lidl store approved about 10 minutes from my house. Ironically it will compete with an existing Aldi plus a Wal-Mart Supercenter, Target, a couple of Asian grocery stores, Giant and a Wegmans that will supposedly be done in late 2018/early 2019.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by klkla »

Here's another article about the prototype they are testing:
https://www.washingtonpost.com/news/bus ... 3a14bd7f4c

In theory building a prototype and doing focus groups to understand your market are important steps. But Fresh & Easy did something this, too, and they failed miserably but not because they didn't do their homework. It was because the executed the strategy poorly.

Lidl has succeeded in 21 other countries so it will be interesting to see how they do here.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by rwsandiego »

klkla wrote:Here's another article about the prototype they are testing:
https://www.washingtonpost.com/news/bus ... 3a14bd7f4c

In theory building a prototype and doing focus groups to understand your market are important steps. But Fresh & Easy did something this, too, and they failed miserably but not because they didn't do their homework. It was because the executed the strategy poorly.

Lidl has succeeded in 21 other countries so it will be interesting to see how they do here.
Thank you for posting that article. This excerpt struck me:

[Brendan] Proctor explains the strategy.

“A lot of the supermarkets are so large, it’s a challenge for people to go shopping,”


I've never walked into a large grocery store to see challenged consumers milling around looking lost and confused. Certainly, it can take some time to find items, any items, in an unfamiliar store, but that will occur in the new Lidl stores when they first open. Solving a problem you don't know you have is one thing, but solving a problem that does not exist is another.

...he said. “If I wanted to go in and get a bottle of ketchup — first of all, there are probably about 24 aisles in the store. I have to find what aisle it’s in. I get there, I find that there’s 50 types of ketchup. Who honestly needs 50 types of ketchup? So we can streamline that.”

That will work only if the majority of customers want the same one or two varieties of ketchup. If I want organic, you want habanero, everyone else wants plan ol' Heinz and they only stock some regional off brand from the Southwest they aren't going to sell any ketchup. If they repeat that across all of the various types of groceries they won't sell much of anything.

Hopefully, for Lidl's sake, they won't become the German equivalent of Fresh and Easy.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by storewanderer »

It is tempting to see a foreign chain try small format in the US and make comparisons to Fresh & Easy. But we really should resist such comparisons until we actually see a store.

However, when you read the quotes from these "representatives" trying to sound like they understand the American Consumer, and completely missing the mark, and making statements that don't even make any sense or give a clear sense of strategy, how can you help but make comparisons to Fresh & Easy?

I wish I was in Lidl territory to see this live.

With as long as they "sat" on the expansion, I wonder if they finally decided to just try and open and see what happened... but are not fully committed.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by pseudo3d »

rwsandiego wrote:
klkla wrote:Here's another article about the prototype they are testing:
https://www.washingtonpost.com/news/bus ... 3a14bd7f4c

In theory building a prototype and doing focus groups to understand your market are important steps. But Fresh & Easy did something this, too, and they failed miserably but not because they didn't do their homework. It was because the executed the strategy poorly.

Lidl has succeeded in 21 other countries so it will be interesting to see how they do here.
Thank you for posting that article. This excerpt struck me:

[Brendan] Proctor explains the strategy.

“A lot of the supermarkets are so large, it’s a challenge for people to go shopping,”


I've never walked into a large grocery store to see challenged consumers milling around looking lost and confused. Certainly, it can take some time to find items, any items, in an unfamiliar store, but that will occur in the new Lidl stores when they first open. Solving a problem you don't know you have is one thing, but solving a problem that does not exist is another.

...he said. “If I wanted to go in and get a bottle of ketchup — first of all, there are probably about 24 aisles in the store. I have to find what aisle it’s in. I get there, I find that there’s 50 types of ketchup. Who honestly needs 50 types of ketchup? So we can streamline that.”

That will work only if the majority of customers want the same one or two varieties of ketchup. If I want organic, you want habanero, everyone else wants plan ol' Heinz and they only stock some regional off brand from the Southwest they aren't going to sell any ketchup. If they repeat that across all of the various types of groceries they won't sell much of anything.

Hopefully, for Lidl's sake, they won't become the German equivalent of Fresh and Easy.
Well, while super-big stores like Walmart, H-E-B, or my horribly overcrowded local H-E-B aren't exactly in and out affairs, it does reflect the European mindset of how stores operate. But if Lidl wants to succeed in the U.S., they need to learn how successful retailers operate, not trying to apply too much of how they think operations should be done. Lidl probably thinks that their planned 30k-35k square foot stores are massive. They probably also think that their store brand will really set alight consumers, when they miss what Trader Joe's offers, sure, they may offer quality alternatives, but they also have invented all sorts of new foods that get people to go into the store in the first place with no real brand name equivalents (cookie butter, sea salt chocolate almonds, "partially popped popcorn", brownie "chips", etc.).

Success in other countries doesn't mean much either. Carrefour and Auchan were big business in Europe, and they struggled in America. Carrefour had a mindset that people would come from miles for the lower prices (they didn't), and despite attempting to turn the stores around, they closed by the mid-1990s. Auchan tried Chicago and Houston, with the Chicago store selling out to Omni within a few years (eventually converting to a Dominick's before Safeway pulled the plug on the massive 100,000+ square foot store), and the Houston store taking years to become profitable (and eventually opening a second local store, but it was too late).

Whether Lidl takes their lumps and really figures out what does and doesn't work to heart or focus on expanding to 100 new stores as their business implodes in a horrifying/hilarious repeat of Fresh & Easy, they're about to learn some hard lessons in American retailing.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by wnetmacman »

pseudo3d wrote:
rwsandiego wrote:
klkla wrote:Here's another article about the prototype they are testing:
https://www.washingtonpost.com/news/bus ... 3a14bd7f4c

In theory building a prototype and doing focus groups to understand your market are important steps. But Fresh & Easy did something this, too, and they failed miserably but not because they didn't do their homework. It was because the executed the strategy poorly.

Lidl has succeeded in 21 other countries so it will be interesting to see how they do here.
Thank you for posting that article. This excerpt struck me:

[Brendan] Proctor explains the strategy.

“A lot of the supermarkets are so large, it’s a challenge for people to go shopping,”


I've never walked into a large grocery store to see challenged consumers milling around looking lost and confused. Certainly, it can take some time to find items, any items, in an unfamiliar store, but that will occur in the new Lidl stores when they first open. Solving a problem you don't know you have is one thing, but solving a problem that does not exist is another.

...he said. “If I wanted to go in and get a bottle of ketchup — first of all, there are probably about 24 aisles in the store. I have to find what aisle it’s in. I get there, I find that there’s 50 types of ketchup. Who honestly needs 50 types of ketchup? So we can streamline that.”

That will work only if the majority of customers want the same one or two varieties of ketchup. If I want organic, you want habanero, everyone else wants plan ol' Heinz and they only stock some regional off brand from the Southwest they aren't going to sell any ketchup. If they repeat that across all of the various types of groceries they won't sell much of anything.

Hopefully, for Lidl's sake, they won't become the German equivalent of Fresh and Easy.
Well, while super-big stores like Walmart, H-E-B, or my horribly overcrowded local H-E-B aren't exactly in and out affairs, it does reflect the European mindset of how stores operate. But if Lidl wants to succeed in the U.S., they need to learn how successful retailers operate, not trying to apply too much of how they think operations should be done. Lidl probably thinks that their planned 30k-35k square foot stores are massive. They probably also think that their store brand will really set alight consumers, when they miss what Trader Joe's offers, sure, they may offer quality alternatives, but they also have invented all sorts of new foods that get people to go into the store in the first place with no real brand name equivalents (cookie butter, sea salt chocolate almonds, "partially popped popcorn", brownie "chips", etc.).

Success in other countries doesn't mean much either. Carrefour and Auchan were big business in Europe, and they struggled in America. Carrefour had a mindset that people would come from miles for the lower prices (they didn't), and despite attempting to turn the stores around, they closed by the mid-1990s. Auchan tried Chicago and Houston, with the Chicago store selling out to Omni within a few years (eventually converting to a Dominick's before Safeway pulled the plug on the massive 100,000+ square foot store), and the Houston store taking years to become profitable (and eventually opening a second local store, but it was too late).

Whether Lidl takes their lumps and really figures out what does and doesn't work to heart or focus on expanding to 100 new stores as their business implodes in a horrifying/hilarious repeat of Fresh & Easy, they're about to learn some hard lessons in American retailing.
You guys are writing them off before they open.

Chains like Aldi and Lidl must be doing something right. Aldi is opening new stores at a record pace. Do they succeed everywhere? Nope. Where they do succeed, however, they are making massive profits. They are doing something right.

Maybe it's the 'open up as big of a store as possible' guys like Walmart, HEB. Kroger, and every other operator. The biggest complaint I hear is from the little old ladies who just can't walk the quarter mile to the back of the store to get a half gallon of milk. It's just too much.
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by BillyGr »

rwsandiego wrote:Thank you for posting that article. This excerpt struck me:

[Brendan] Proctor explains the strategy.

“A lot of the supermarkets are so large, it’s a challenge for people to go shopping,”


I've never walked into a large grocery store to see challenged consumers milling around looking lost and confused. Certainly, it can take some time to find items, any items, in an unfamiliar store, but that will occur in the new Lidl stores when they first open. Solving a problem you don't know you have is one thing, but solving a problem that does not exist is another.

...he said. “If I wanted to go in and get a bottle of ketchup — first of all, there are probably about 24 aisles in the store. I have to find what aisle it’s in. I get there, I find that there’s 50 types of ketchup. Who honestly needs 50 types of ketchup? So we can streamline that.”

That will work only if the majority of customers want the same one or two varieties of ketchup. If I want organic, you want habanero, everyone else wants plan ol' Heinz and they only stock some regional off brand from the Southwest they aren't going to sell any ketchup. If they repeat that across all of the various types of groceries they won't sell much of anything.

Hopefully, for Lidl's sake, they won't become the German equivalent of Fresh and Easy.
Of course, the other four letter chain (Aldi) has been basically doing that for years. A limited selection (many times only one or maybe two types of a particular item), mostly of their own brands (with occasional national brands when they get a deal on them). And of course a bit easier to find them due to a small number of aisles, even if you find the item after walking up & down all of them, that's only a fraction of the time/effort of a regular store.
Apparently it's worked out OK for them since they continue to expand and do well (at least in this part of the US, where they've been around for years I can't think of many, if any, stores that they closed).
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Re: German chain Lidl sets eyes on Virginia, Carolinas

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:
rwsandiego wrote: Thank you for posting that article. This excerpt struck me:

[Brendan] Proctor explains the strategy.

“A lot of the supermarkets are so large, it’s a challenge for people to go shopping,”


I've never walked into a large grocery store to see challenged consumers milling around looking lost and confused. Certainly, it can take some time to find items, any items, in an unfamiliar store, but that will occur in the new Lidl stores when they first open. Solving a problem you don't know you have is one thing, but solving a problem that does not exist is another.

...he said. “If I wanted to go in and get a bottle of ketchup — first of all, there are probably about 24 aisles in the store. I have to find what aisle it’s in. I get there, I find that there’s 50 types of ketchup. Who honestly needs 50 types of ketchup? So we can streamline that.”

That will work only if the majority of customers want the same one or two varieties of ketchup. If I want organic, you want habanero, everyone else wants plan ol' Heinz and they only stock some regional off brand from the Southwest they aren't going to sell any ketchup. If they repeat that across all of the various types of groceries they won't sell much of anything.

Hopefully, for Lidl's sake, they won't become the German equivalent of Fresh and Easy.
Well, while super-big stores like Walmart, H-E-B, or my horribly overcrowded local H-E-B aren't exactly in and out affairs, it does reflect the European mindset of how stores operate. But if Lidl wants to succeed in the U.S., they need to learn how successful retailers operate, not trying to apply too much of how they think operations should be done. Lidl probably thinks that their planned 30k-35k square foot stores are massive. They probably also think that their store brand will really set alight consumers, when they miss what Trader Joe's offers, sure, they may offer quality alternatives, but they also have invented all sorts of new foods that get people to go into the store in the first place with no real brand name equivalents (cookie butter, sea salt chocolate almonds, "partially popped popcorn", brownie "chips", etc.).

Success in other countries doesn't mean much either. Carrefour and Auchan were big business in Europe, and they struggled in America. Carrefour had a mindset that people would come from miles for the lower prices (they didn't), and despite attempting to turn the stores around, they closed by the mid-1990s. Auchan tried Chicago and Houston, with the Chicago store selling out to Omni within a few years (eventually converting to a Dominick's before Safeway pulled the plug on the massive 100,000+ square foot store), and the Houston store taking years to become profitable (and eventually opening a second local store, but it was too late).

Whether Lidl takes their lumps and really figures out what does and doesn't work to heart or focus on expanding to 100 new stores as their business implodes in a horrifying/hilarious repeat of Fresh & Easy, they're about to learn some hard lessons in American retailing.
You guys are writing them off before they open.

Chains like Aldi and Lidl must be doing something right. Aldi is opening new stores at a record pace. Do they succeed everywhere? Nope. Where they do succeed, however, they are making massive profits. They are doing something right.

Maybe it's the 'open up as big of a store as possible' guys like Walmart, HEB. Kroger, and every other operator. The biggest complaint I hear is from the little old ladies who just can't walk the quarter mile to the back of the store to get a half gallon of milk. It's just too much.
Aldi has had years (decades) to perfect a merchandise mix that is both inexpensive, convenient, and even a bit fun (that's partly from imported foods). Aldi probably also "won" the United States simply because there was nothing like it before, and good management--about the time Aldi came stateside (to Iowa of all places), while A&P's attempt at replicating the "Plus" stores in Germany was a massive failure (partly because of bad management).

It's really not the small store format of Lidl that will end up killing them, after all, Kroger, H-E-B, Albertsons/Safeway, Food Lion, and Publix all operate a number of smaller stores, it's more of how Lidl thinks how American consumers operate (they probably didn't even take into account rural/suburban differences) and the seemingly-conflicting way of how they want their store to be.
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