2023 Lidl closings

[pseudo3d]

Lidl at this point is a dead chain walking. Their plan to enter Texas was scuttled a few years ago. Schwarz-Gruppe, the parent company of Lidl, needs to come up with a plan fast.

Maybe once the Albertsons/Kroger deal falls through, they buy Albertsons and merge what's left of Lidl into it.

Yeah, I know, very unlikely and probably cause more harm than good, but they should keep their options open.

[Brian Lutz]

(Link to a relevant Triad Business Journal article in the post but it's paywalled)

Lidl has decided not to proceed with a a purchase agreement on a 3 acre site owned by the City of Greensboro at the corners of Elm Street and Gate City Boulevard (basically at the edge of Downtown) because it was found by NC's Department of Environmental Quality that the site needs additional cleanup before it can be built on. The city's planning director says that Lidl is still interested in locating a store here if this cleanup can be completed in a timely manner, and this does seem to be an underserved area. Even though there are four different college campuses within a couple of miles of this site the nearest grocers are all several miles away.

[pseudo3d]

(Link to a relevant Triad Business Journal article in the post but it's paywalled)

Lidl has decided not to proceed with a a purchase agreement on a 3 acre site owned by the City of Greensboro at the corners of Elm Street and Gate City Boulevard (basically at the edge of Downtown) because it was found by NC's Department of Environmental Quality that the site needs additional cleanup before it can be built on. The city's planning director says that Lidl is still interested in locating a store here if this cleanup can be completed in a timely manner, and this does seem to be an underserved area. Even though there are four different college campuses within a couple of miles of this site the nearest grocers are all several miles away.

Learn to use archived links.

[storewanderer]

Lidl at this point is a dead chain walking. Their plan to enter Texas was scuttled a few years ago. Schwarz-Gruppe, the parent company of Lidl, needs to come up with a plan fast.

Maybe once the Albertsons/Kroger deal falls through, they buy Albertsons and merge what's left of Lidl into it.

Yeah, I know, very unlikely and probably cause more harm than good, but they should keep their options open.

Lidl should have tried to enter regions showing growth where Aldi isn't. Regions like Colorado, Nevada, Oregon, Utah, Washington. Those regions aren't terribly different from a grocery/taste perspective especially with a discount store, there is no Aldi presence (though there is Grocery Outlet in some of that territory well established).

Instead Lidl played lazy and insisted on east coast. I assumed they wanted to focus on densely populated areas. That's fine but there is a lot of competition back there... Then started to go into wayward not dense territories like the Carolinas. Completely different markets.

Another way out there idea I'd throw out is for Lidl to "take over" the grocery operation of Target. Absolute zero chance of that happening but I think it could help both parties.

[Brian Lutz]

Lidl should have tried to enter regions showing growth where Aldi isn't. Regions like Colorado, Nevada, Oregon, Utah, Washington. Those regions aren't terribly different from a grocery/taste perspective especially with a discount store, there is no Aldi presence (though there is Grocery Outlet in some of that territory well established).

Instead Lidl played lazy and insisted on east coast. I assumed they wanted to focus on densely populated areas. That's fine but there is a lot of competition back there... Then started to go into wayward not dense territories like the Carolinas. Completely different markets.

Another way out there idea I'd throw out is for Lidl to "take over" the grocery operation of Target. Absolute zero chance of that happening but I think it could help both parties.

Out of all of those states Colorado is the only one that WinCo isn't well established in, and I don't think a Lidl store is going to have much chance of competing against a full-sized, full-service WinCo store that does huge volume (there seem to be a lot of customers that fill their carts to the brim on a WinCo run, sometimes even two carts) and can very likely outprice them on just about everything in the store. It's one thing for them to compete mostly against high price competitors like Harris-Teeter, Lowes and Publix or low-end stores like Food Lion and still struggle to gain market share, but if they're up against operators like Grocery Outlet and WinCo they're not getting much anywhere.

[ClownLoach]

Lidl at this point is a dead chain walking. Their plan to enter Texas was scuttled a few years ago. Schwarz-Gruppe, the parent company of Lidl, needs to come up with a plan fast.

Maybe once the Albertsons/Kroger deal falls through, they buy Albertsons and merge what's left of Lidl into it.

Yeah, I know, very unlikely and probably cause more harm than good, but they should keep their options open.

Another way out there idea I'd throw out is for Lidl to "take over" the grocery operation of Target. Absolute zero chance of that happening but I think it could help both parties.

Several years back now Target went in the direction of making a "strategic focus" on "key food areas" versus the whole department, along with revamping all the food and apparel house brands. This is when we started to see stores "de-supered" and such. As much as we all like to criticize Target foods - they continue to improve now in the remaining Super locations and seem to be emphasizing those as their most important stores. But more importantly they've effectively grown from revenue around $70B to over $100B with the gross majority of the chain operating on the P-fresh model. That $30B in growth has come at a time when they've also lost significant momentum in electronics where they did very good volume a decade ago ($6M to $8M a year per store, now a fraction of that). More of that $30B growth has come from food than apparel or any other channel. So in Target's eyes their food departments have never been stronger performers. The piece that we don't see is what kinds of food products will get the customer into Target's door vs. Kroger or whoever else. Apparently the areas they really pumped up (Snacks and Nutrition Bars, Yogurts, Frozen, Wine, I can't remember the others) are the items attached to the biggest and most frequent baskets. They cause Target to skim traffic from conventional grocers without the costs of full fresh perimeters.

[ClownLoach]

This sounds an awful lot like Fresh and Easy. Shrinking to grow doesn't work for a startup. The dead rent on the closed stores eventually strangles the entire entity.

I haven't seen a Lidl yet, but the description of being similar to Aldi but lacking the "Aldi Finds" limited time special foods would mean I would probably buy much less from a Lidl than an Aldi. Whenever I stumble into Aldi I always find at least half a dozen "Aldi Finds" that I just have to try. That aspect makes the store interesting and fun to shop. Remove that and not only would I not go there impulsively, but I wouldn't buy much when I was there. It doesn't sound like they have anything to make up for the absence of such specialty items aside from an in store bakery.

If I am right about my analysis then I would imagine Lidl would have decent foot traffic but the basket size and average transaction would be so low that the store can't generate enough revenue to be profitable. They need some kind of "edge" to get the customers in the door regularly, and get them to buy more than they planned to when they get there. It doesn't sound like Lidl has any "edge" besides low price.

Based on that I don't think they would experience any success out West either. It doesn't sound like they've got a price issue. Sounds like the store fleet is inconsistent and either a new prototype or a reused building but all are failing so that isn't the issue. Locations also sound pretty diverse with failure in all types of areas so again not a location issue. People? It's a low service model so expectations would be low. Thus the problem is product. They don't have the right product line to drive profitable sales and repeat business.

I am not sure where you got the impression Lidl does not have any "finds" type items however that is very incorrect. On food these stores constantly get in one time items. On non food which is the main part of "Aldi Finds" Lidl also has a very similar program. They allocate more space and have better presentation on those items than Aldi has. I think the problem with the items Lidl has is they are too "practical" - like they are not stuff you would buy unless you actually needed it. They also seem to get nicer items. Lidl gets in various season-relevant general merchandise items just like Aldi. I suspect they are having problems moving these items and may be better off cutting it by 50% and just focusing on food. Aldi Finds on the other hand tend to be impulse buy type items, things you did not think you needed but make the decision to buy impulsively.

The only Lidl units I've been to are new builds. They are very nice stores. They are far nicer than a typical Aldi building. They are more spacious, better presented, have offered self checkout from day one, have a nicer entry/exit area, nicer restrooms, basically everything about them is nicer than an Aldi.

As far as mix goes Lidl has a larger mix of high use items and has more national brand items than Aldi, but over time Lidl seemed to be expanding private label items. I haven't been in Lidl enough to assess how their in stock condition is over time but whenever I've been there the stores seem well stocked.

I almost think they have gone too big with their stores and the expense structure is too high. These are supposed to be a low labor model/low overhead type of operation. The buildings are modern and look very energy efficient. How can it possibly make sense to pay leases on dark stores vs. keep these low expense structure stores open?

My suspicion is Lidl's problem is they are trying to compete on price but they are actually not able to do it because they have too few stores. So they are basically losing more and more money, the more they sell. So even stores that look to be moving plenty of product are losing enough money that they decide to just shut them down. Unlike Aldi with far greater buying power due to having more stores, Lidl is trying to compete with these companies that have greater buying power but with too few stores.

It also appears Lidl is further screwing around by requiring a "My Lidl" loyalty card for various sale prices. I do not recall and kind of hassle or hoop like this with Aldi. This defeats the whole purpose of a rock bottom price store to be running digital promotions requiring an app or something.

Then to make matters worse this Lidl management keeps closing stores. They probably need more stores to increase volume and get cost per unit down so they can move up into a higher buying bracket. I just think they are done in the US based on this store closure activity.

My knowledge of Lidl is coming off these posts so that is how I may have misunderstood their product selection.

I don't see the "Aldi Finds" general merchandise being much of a draw, although when they want to get rid of it they don't mess around with the markdowns. I got a barbecue cover gazebo that is obviously the same as one Lowe's had earlier in the season for $179.99. Aldi original price was $139.99 and the clearance price was $24.99. Thankfully I was able to fit it in the car with the back seat folded down. But even knowing of the chance of exceptional bargain general merchandise isn't going to get me to make an impulse trip there.

The product I was thinking about is the "Aldi Finds" special foods that are limited time buys. Most of these are very good; in fact the quality is usually better than everyday Aldi big brand knockoffs (for example their Kraft salad dressing knockoff is inedible due to the massive amount of corn syrup). They get great German foods in October. They've had some Christmas season products that were rival quality to Trader Joe's, like a delicious rum cake (with alcohol!). It sounded like Lidl doesn't have that type of merchandise. That treasure hunt is why I will stop into Aldi if I'm there and have time. There's an Aldi next door to where I get my hair cut and I almost always walk over once I'm done or before if there is a wait and I never leave empty handed. I just don't see that I would ever replace a full grocery run with an Aldi visit as they intend, versus Winco where I can generally fill an entire cart with the exception of meat (I've never seen acceptable quality meats there). If this kind of product isn't at Lidl on a regular basis then I maintain that I wouldn't be interested in such a store. Variety is the spice of life and I enjoy being able to shop these stores that have some surprise unexpected items.

[BatteryMill]

This story has taken an interesting turn, particularly for the Maryland stores: https://www.bizjournals.com/washington/ ... arket.html

[mjhale]

This story has taken an interesting turn, particularly for the Maryland stores: https://www.bizjournals.com/washington/ ... arket.html

This new location on Queens Chapel Road seems to have less non-ethnic grocery competition than the Oxon Hill store did. Plus this new location is closer to DC proper and may give Lidl more access to city dwellers who have limited grocery options. Here's the thing though, the Lidl in Oxon Hill was only up against a so-so Safeway and an Aldi. It wasn't as if they were getting destroyed by some strong competitor. Certainly PFresh at the small format Target in Oxon Hill didn't do in Lidl. Adds more credence to something larger being wrong at Lidl as we have discussed in this subject thread.

Side Note: This new Lidl location was originally an early suburban Giant-MD. I think they closed the store in the early 2010s. Also, I guess Wakefern has given up on the DC market with the Price Rite stores. The one in Woodbridge closed a while ago and now this one is closed. The only Price Rite store left in MD is in Baltimore. I thought maybe if Price Rite worked in the DC area Wakefern might try some Shop Rite stores down this way.

[HCal]

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.