HCal wrote: ↑July 24th, 2023, 10:11 pm
Anyone know who is supplying Lidl in the US? Are they using someone like Topco or are they buying direct? If they are trying to buy direct and aren't big enough, that might be part of the issue.
They are supposedly buying direct...
Closing stores won't help this case.
As far as the Lidl Finds go I don't remember anything beyond seasonal type food items. No random surprises. And probably too few stores to have it make sense. Plus the ethnic demands back east are quite diverse/unique to specific markets. What the customer in the DC area demands is completely different from the Carolinas. Lidl picked some tough territories to try to hit tastes in. Very different tastes in these regions.
It really sounds to me like Lidl should make a deal with the devil and sell this US operation to Aldi. They could do a prepackaged bankruptcy to close overlapping stores that Aldi doesn't want so they could free themselves of these dead leases nobody would want to take on. They could potentially sell some assets to Trader Joe's if they're interested in some sites too. But they need to sell out and pull out because there clearly isn't a customer desire for what they're selling and there are some very bizarre transactions occurring that indicate a degree of recklessness that threatens the entire organization. Nobody closes a new store, keeps the dead rent liability, then tries to open another store across town or down the road. The liabilities just keep adding up into a quagmire.
Aldi has a pretty good track record of somehow figuring out the demographics and their unique wants/desires quickly.
When you think about their short tenure in the US so far, they've been able to do what many newer/expanding chains could not. Fresh and Easy. Amazon Fresh. Walmart Marketside. Walmart Express. (Most) Walmart Neighborhood Markets. The Fresh Market.
Aldi isn't perfect, but it must be doing something right to still be open and growing. When you consider the cost structure of running any kind of retail chain today it is obvious that they must be profitable across the vast majority of the US store fleet, otherwise frankly they would have already left.
I think there is only so much room for these small format German style markets with limited assortment/knockoff product. Trader Joe's takes a lot of that room as an Americanized version of the concept. Aldi (yes I know they're loosely related) does too. But how much room is there beyond that? I don't see room for Lidl in the equation, nor do I see a chance now where they could dominate entire regions and squeeze Aldi out of them.
Lidl needs to just sell and leave before they turn into another multi-billion dollar loser. (might be too late?)
ClownLoach wrote: ↑July 24th, 2023, 11:07 pm
It really sounds to me like Lidl should make a deal with the devil and sell this US operation to Aldi. They could do a prepackaged bankruptcy to close overlapping stores that Aldi doesn't want so they could free themselves of these dead leases nobody would want to take on. They could potentially sell some assets to Trader Joe's if they're interested in some sites too. But they need to sell out and pull out because there clearly isn't a customer desire for what they're selling and there are some very bizarre transactions occurring that indicate a degree of recklessness that threatens the entire organization. Nobody closes a new store, keeps the dead rent liability, then tries to open another store across town or down the road. The liabilities just keep adding up into a quagmire.
Aldi has a pretty good track record of somehow figuring out the demographics and their unique wants/desires quickly.
When you think about their short tenure in the US so far, they've been able to do what many newer/expanding chains could not. Fresh and Easy. Amazon Fresh. Walmart Marketside. Walmart Express. (Most) Walmart Neighborhood Markets. The Fresh Market.
Aldi isn't perfect, but it must be doing something right to still be open and growing. When you consider the cost structure of running any kind of retail chain today it is obvious that they must be profitable across the vast majority of the US store fleet, otherwise frankly they would have already left.
I think there is only so much room for these small format German style markets with limited assortment/knockoff product. Trader Joe's takes a lot of that room as an Americanized version of the concept. Aldi (yes I know they're loosely related) does too. But how much room is there beyond that? I don't see room for Lidl in the equation, nor do I see a chance now where they could dominate entire regions and squeeze Aldi out of them.
Lidl needs to just sell and leave before they turn into another multi-billion dollar loser. (might be too late?)
I see no logic to Lidl closing a store and then looking to build a new store nearby. That makes no sense. At a minimum you'd keep the existing store open then relocate it once the new store is built. Unless they are signing 2 year leases or something weird and just jumping locations. This doesn't make much sense.
The Lidl buildings are a poor fit for Aldi; they are too nice/too large for Aldi. Too large for Dollar General. I'm not quite sure what a good conversion for these Lidl buildings is. They are too large for a chain drugstore but CVS could put up a very spacious/full line "health hub" plus dental optical whatever in them if it made sense.
It is actually funny you mention The Fresh Market (they are still open... just not out west) as that is one format I was thinking some of these Lidl buildings could convert into (the size matches up) as I know some of them are in higher income type areas. Same for Grocery Outlet (size matches up).
The jury is still out on this Aldi expansion and how it will work out in geographies like CA, AZ, etc.
BatteryMill wrote: ↑July 25th, 2023, 8:44 pm
I'm not convinced... this small closing round and Lidl is near bankruptcy?
I don't know that they are, but their behavior is very odd.
It also is not clear how they can afford to sit on so many dark stores unless they have an immediate way out of these leases that they have only recently entered into.
storewanderer wrote: ↑July 24th, 2023, 11:50 pm
The Lidl buildings are a poor fit for Aldi; they are too nice/too large for Aldi. Too large for Dollar General. I'm not quite sure what a good conversion for these Lidl buildings is. They are too large for a chain drugstore but CVS could put up a very spacious/full line "health hub" plus dental optical whatever in them if it made sense.
It is actually funny you mention The Fresh Market (they are still open... just not out west) as that is one format I was thinking some of these Lidl buildings could convert into (the size matches up) as I know some of them are in higher income type areas. Same for Grocery Outlet (size matches up).
Well, one of my local Aldi's is in a 'The Fresh Market' space that never opened, and I'm almost certain the building size was not reduced prior to Aldi taking over, so if the sizes are about the same, Aldi should have no issues moving into former Lidl stores if it ever gets to that point.
storewanderer wrote: ↑July 24th, 2023, 11:50 pm
The Lidl buildings are a poor fit for Aldi; they are too nice/too large for Aldi. Too large for Dollar General. I'm not quite sure what a good conversion for these Lidl buildings is. They are too large for a chain drugstore but CVS could put up a very spacious/full line "health hub" plus dental optical whatever in them if it made sense.
It is actually funny you mention The Fresh Market (they are still open... just not out west) as that is one format I was thinking some of these Lidl buildings could convert into (the size matches up) as I know some of them are in higher income type areas. Same for Grocery Outlet (size matches up).
Well, one of my local Aldi's is in a 'The Fresh Market' space that never opened, and I'm almost certain the building size was not reduced prior to Aldi taking over, so if the sizes are about the same, Aldi should have no issues moving into former Lidl stores if it ever gets to that point.
What square footage was that The Fresh Market space? I've seen their stores as small as 15,000 square feet and as large as 25,000 square feet. The Lidl buildings are closer to the large end of that range.
How many 25,000 square foot stores does Aldi run? I suppose if the price was right they'd go for it... but an oversized space messes with their efficiency model.
storewanderer wrote: ↑July 26th, 2023, 10:22 pm
What square footage was that The Fresh Market space? I've seen their stores as small as 15,000 square feet and as large as 25,000 square feet. The Lidl buildings are closer to the large end of that range.
Phew..took me a bit to find, but its a 22,450 sq ft. space. While there is a bit of wasted space compared to other local Aldi's (and an odd interior cart vestibule), it doesn't feel too overly large, unless there is a lot of unused backroom space that has been hidden by walls.
storewanderer wrote: ↑July 26th, 2023, 10:22 pm
What square footage was that The Fresh Market space? I've seen their stores as small as 15,000 square feet and as large as 25,000 square feet. The Lidl buildings are closer to the large end of that range.
Phew..took me a bit to find, but its a 22,450 sq ft. space. While there is a bit of wasted space compared to other local Aldi's (and an odd interior cart vestibule), it doesn't feel too overly large, unless there is a lot of unused backroom space that has been hidden by walls.
The interior cart vestibule was probably intended to be a Floral Department for The Fresh Market, or possibly produce.
The Fresh Market's best size was a little under 20k square feet in my opinion. But the store is very "stretchable."
storewanderer wrote: ↑July 24th, 2023, 11:50 pm
The Lidl buildings are a poor fit for Aldi; they are too nice/too large for Aldi. Too large for Dollar General. I'm not quite sure what a good conversion for these Lidl buildings is. They are too large for a chain drugstore but CVS could put up a very spacious/full line "health hub" plus dental optical whatever in them if it made sense.
It is actually funny you mention The Fresh Market (they are still open... just not out west) as that is one format I was thinking some of these Lidl buildings could convert into (the size matches up) as I know some of them are in higher income type areas. Same for Grocery Outlet (size matches up).
Well, one of my local Aldi's is in a 'The Fresh Market' space that never opened, and I'm almost certain the building size was not reduced prior to Aldi taking over, so if the sizes are about the same, Aldi should have no issues moving into former Lidl stores if it ever gets to that point.
What square footage was that The Fresh Market space? I've seen their stores as small as 15,000 square feet and as large as 25,000 square feet. The Lidl buildings are closer to the large end of that range.
How many 25,000 square foot stores does Aldi run? I suppose if the price was right they'd go for it... but an oversized space messes with their efficiency model.
It occurred to me that there's an ALDI near me, Livingston, NJ, in a former Fresh Market space. That's 23,000 square feet. Incidentally, the space and the two next to it originally made up a 36,000 square foot Grand Union, later Pathmark. I've only been there a few times but it doesn't feel particularly oversized, although I'm also not too familiar with ALDI's stores.
