German chain Lidl sets eyes on Virginia, Carolinas

[J-Man]

'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.'

This makes no sense. Trader Joe's sells almost NO brand-name products at all, high end or otherwise.

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.

This sounds nearly identical to what Aldi does.

[pseudo3d]

'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.'

This makes no sense. Trader Joe's sells almost NO brand-name products at all, high end or otherwise.

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.

This sounds nearly identical to what Aldi does.

From Aldi's latest ad as of this writing, all of their non-food "Aldi Finds" that aren't food or kitchen related have a common theme--in this case, arts and crafts, with coloring books, children's toys, and books on origami. Not a random assortment of whatever you can find. That's practically guaranteed to be dead space.

The problem is it feels too much like this all came out of a German boardroom meeting that probably started like "You know, our competitor Aldi is doing very well in the United States and expanding rapidly. I think that we can make our store work there too," "Well, boss, I don't think that would work, I think we'll just look like a ripoff. I mean, our name is already similar enough," and then spent the next hour researching, which is probably why they sound so disjointed--almost as if someone had read about Trader Joe's and Harris Teeter on Wikipedia and maybe a few Yelp reviews but really missing the point.

[mjhale]

You guys are writing them off before they open.

Perhaps we are. However I think that what people here are reacting to the most are the statements made by Lidl executives as to what the store is going to be all about. That is most likely what the public will hear at some point before the official marketing program gets out there. The disjointed nature of the message right now is confusing and will make people wonder more about Lidl than want to check them out. It isn't creating a sense of desire to check out the newcomer. Maybe that wonder will make people go and see what Lidl is all about. Maybe it won't. I agree with pseudo3d that the Lidl approach is a me too kind of thing throwing stuff on the wall to see what sticks.

[pseudo3d]

The second thing is that unlike Fresh & Easy, Lidl is also going into a completely different part of the country--Houston, with their first store being not too far away from an H-E-B. While this means I might be able to visit a Lidl, it's a horrific idea because not only is Lidl now dividing their attention to another part of the country (with separate divisions and distribution, I suppose) but also an extremely competitive one.

So it's down the street from a large and popular H-E-B, which already has low prices, and the market is crowded with Kroger, which H-E-B and Kroger share #1 and #2 (in traditional grocery), there's Costco and Walmart Supercenter, Fiesta and the ethnic supermarkets, Whole Foods, Trader Joe's, Randalls still hanging on with nowhere near the top market share but still in better neighborhoods and some suburbs, and finally Aldi, which got their first and has now planted a number of stores. With The Fresh Market recently run out of town, this means that if Lidl does poorly in Houston, then it will cannibalize the Virginia/Carolinas stores which already have a dubious future.

[Knight]

Lidl is taking a risk leapfrogging into Texas. Grocery retailers that have leapfrogged have struggled to the point of closing stores and exiting markets.

[pseudo3d]

Lidl is taking a risk leapfrogging into Texas. Grocery retailers that have leapfrogged have struggled to the point of closing stores and exiting markets.

Leapfrogging is dangerous, too, in the early 1990s, rather than try to repair their base in the Midwest, Venture went into Texas, built a huge new distribution center in Corsicana, Texas, and built stores in Houston and Dallas. It ended up sinking the entire chain.

[Knight]

The Fresh Market leapfrogged to the mid-western and western United States instead of infilling in its contingent footprint.

[wnetmacman]

Lidl is taking a risk leapfrogging into Texas. Grocery retailers that have leapfrogged have struggled to the point of closing stores and exiting markets.

Did somebody say Food Lion?

[Knight]

Food Lion did not leapfrog. It opened too many stores with extra high prices and nothing in Alabama, Florida, Louisiana, Mississippi, Oklahoma, and Texas. After divesting stores to Weis Markets and Shop 'n Save, Food Lion should be on the clock in Delaware, Maryland, and Pennsylvania. Exits from Kentucky, Tennessee, and West Virginia should be probable.

[wnetmacman]

Food Lion did not leapfrog. It opened too many stores with extra high prices and nothing in Alabama, Florida, Louisiana, Mississippi, Oklahoma, and Texas. After divesting stores to Weis Markets and Shop 'n Save, Food Lion should be on the clock in Delaware, Maryland, and Pennsylvania.

Food Lion never operated in Mississippi and Alabama. The only Louisiana stores were in Shreveport. That was a leapfrog, to operate in Dallas, Houston and Oklahoma City.