German grocery powerhouse Lidl officially landed in the U.S. in June and has opened 37 stores on the East Coast. While initial sales were strong at most locations, customer traffic has slipped at some of them leading to a management shuffle at Lidl.

Neil Stern of McMillan Doolittle noted in his recent article for Forbes that the Lidl stores he visited had low customer traffic levels and:

  • felt overly spacious and sterile

  • were too reliant on non-foods

  • in-store programs like sampling were being poorly executed

  • were too large and overly-engineered (11 full-sized checkout lanes)

Space race –  Given the proposed fast pace of store openings, there is a risk that Lidl may pursue quantity of physical space over quality of location.

Unfamiliar territory – Lidl is not only challenged with entering a new market, it’s creating a new store format as its U.S. stores are significantly larger than their stores in Europe.

On the positive side, Stern added:

–           Leading with an in-store bakery gives a great emphasis on fresh, as does the expanded produce area.

–           The wine section was well done and prices on private label were very competitive.

Lidl’s early struggles demonstrates that even for the most successful retailers, what works in Europe doesn’t always work here and vice versa. But while Lidl may be facing some headwinds in its entry into the U.S. market, competitors should not underestimate the German company’s ability to make adjustments as they better understand the local competitive landscape and the American grocery shopper.

Stay tuned.


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