2023 Lidl closings

[BatteryMill]

In the past few weeks, Lidl has announced a string of closings across their U.S. store base.

So far closing are:
Brooklyn Park, MD
Thomasville, NC
Burlington, NJ
Howell, NJ
Florence, SC
Charlottesville, VA
Richmond, VA

This has to be their largest closing round since operations began in 2017. What's the deal here - are their American stores in trouble? I'm concerned since it includes some of their newer locations, which have been more strategically placed and open to all sorts of building sizes.

Sources
https://www.supermarketnews.com/retail- ... -across-us
https://foxbaltimore.com/news/city-in-c ... ose-friday
https://www.courierpostonline.com/story ... 396084007/

[storewanderer]

Yet they do continue to open/announce new stores...

It is unfortunate. I think their format is excellent. The problem is they must not be pulling the volumes they need, and some of the stores they are opening strike me as oversized. The expense structure may be too high. Something is clearly not working. Also given many of these are newer stores it seems to imply so much money is being lost that they'd rather give up quickly on these locations and keep paying the lease than try to drive more volume in, which I also find to be somewhat confusing.

Only the best for us here in the US. Aldi and Wal Mart all the way. If you really want an upgrade you find a Kroger. Sigh.

[mbz321]

Yet they do continue to open/announce new stores...

This is what puzzles me the most...what is their long term strategy here? They also have plans (as of this past February) for a new distribution center outside of Philadelphia. I only shop at Lidl once in a while as I don't have any real convenient to me, but IMO, the produce quality is even worse than Aldi. OTOH, I find they have an abnormally large section of fresh meats compared to Aldi, maybe too large.

[BatteryMill]

Yet they do continue to open/announce new stores...

It is unfortunate. I think their format is excellent. The problem is they must not be pulling the volumes they need, and some of the stores they are opening strike me as oversized. The expense structure may be too high. Something is clearly not working. Also given many of these are newer stores it seems to imply so much money is being lost that they'd rather give up quickly on these locations and keep paying the lease than try to drive more volume in, which I also find to be somewhat confusing.

Only the best for us here in the US. Aldi and Wal Mart all the way. If you really want an upgrade you find a Kroger. Sigh.

Some of them are newer (taking advantage of existing retail spaces), some are older and thus larger (Florence, SC).

[Brian Lutz]

Thomasville seems rather odd as the reviews on the store don't seem to indicate any problem (4.4 stars on Google with around 1,300 reviews). Lidl also just recently opened another store in Greensboro, not too far away. It is located across the street from an Ingles store and there's also an Aldi and a Food Lion nearby on the opposite side of I-85. Best I can figure is that costs are well in excess of revenue if they are closing the store that quickly.

[marketreportblog]

Yet they do continue to open/announce new stores...

And there's also a few LIDLs that have been fully built out with coming soon signage, but are still vacant and have no indication they'll actually open. Livingston, NJ at 599 NJ-10 has been basically ready to go since at least the winter but remains unopened -- not to mention LIDL themselves never actually announced the store beyond signage at the site. I think there's at least another one or two in northern NJ that are in the same status. Then there are stores like Rockaway, approved in late 2020 by the local planning board but not even started -- in fact, the Rockaway one is still operating as another grocery store, the Rockaway Farmers Market. Others, like Parsippany (currently a Foodtown) were planned as much longer-term projects but have had almost no actual progress.

Meanwhile, LIDL seems to be excited about New York City, where they have an increasing presence but I'm not sure how well they're doing. I've been to the Harlem store a few times, and there have never been a few people around the store. No real traffic, but I don't know about the other greater NYC locations. Haven't been to any of the Long Island locations, although they get solid reviews online but I don't know how the sales volumes are.

[storewanderer]

What bothers me about these closures is they are across a wide range of geographies, population densities, and demographics.

There is no common trend to the closures that I can see. Some of them go against what I consider to be pretty weak competitors.

Unless leases are ending, which seems unlikely, I do not understand why they are closing all of these. I guess I need to come to terms with the fact that they simply must not be doing well.

Maybe Grocery Outlet can take the NJ and MD buildings.

[marketreportblog]

Storewanderer, I agree about Grocery Outlet. It looks like they REALLY want to expand in NJ and the mid-Atlantic region. So far, I like what I see, but I’ve only been to a few.

Also comes to my mind that they planned, bought, never opened, and then sold a store out in PA: https://www.pennlive.com/business/2023/ ... lding.html

This sounds a bit like Amazon Fresh to me, although the similarities are mostly superficial. Here’s a question: forget about planned stores a minute, what do LIDL’s actual new store opening numbers look like? I see two in June and one in May, but not a whole lot in the months before that (that’s just quick Googling, so correct me if I’m wrong). It’s not a lot — and it seems it’s definitely slowed down — but they are in fact opening new stores. So it might be more the case that they’re still genuinely expanding and at least breaking even, but that there are some locations that simply, for whatever reason, aren’t working. Or this could be the precursor to a major downsizing or even closure of the chain in the US… but I doubt anything so dramatic will be happening soon.

[mbz321]

Add King of Prussia, PA to the list. This one only opened back in February 2022 in a former Stein Mart. Some commenters on a Reddit thread indicate that the property was difficult to access (and maybe was a bit too downscale for the area. There is another location about 15 minutes away in the Norristown area).

[storewanderer]

I actually wonder if an attempt to merge Grocery Outlet and Lidl could work. They could use the Lidl formula for staple items which have always been a bit of a crapshoot at Grocery Outlet, but keep the random oddball close out items Grocery Outlet brings to the table. There is the issue of the operator and consigned inventory model Grocery Outlet uses. And Lidl's bakery wouldn't fit.

Random store closures, selling off real estate previously purchased, all come off as curious "why?" moves. I think it is becoming obvious "why..." the question at this point is when will they give it up.

I wonder what Lidl is telling its investors about the US situation.