German grocery giant Lidl just opened its first U.S store and boldly claimed;

“Shoppers can expect to get top quality goods and groceries at up to 50 percent less than other supermarkets in the U.S.” A very compelling offer, but how many products this discount applies to remains to be seen.

Lidl opened 10 stores on Thursday in North Carolina, South Carolina and Virginia. Ten more are planned to open this summer with a total of 100 East Coast locations by next summer. The company operates over 10,000 stores in Europe.

At 20,000 square feet, Lidl stores are much smaller than typical supermarkets and designed to be easy for customers to quickly navigate. Two aisles in the center of the store offer “Lidl Surprises” which are non-food items that are always changing and sold while supplies last.

About 90 percent of Lidl products are private label brands, including organic and gluten-free options and it will offer European items, including wines and Belgian chocolates to attract higher income clientele. Lidl’s business model minimizes labor costs, which allows for cheaper produce in-store. All of which will also garner the attention of Trader Joe’s and Aldi, owned by another German grocery rival powerhouse.

Already in price wars, major U.S. grocery chains are preparing further discounts.  Kroger is cutting prices primarily in private label products and advertising its price cuts on giant billboards. The cuts average 20% and are “mainly in center of store categories and in some private label perishables”.

So who has the most to fear from Lidl? In the UK, Lidl stores are similar to Aldi and both have grown at the expense of big box discounters. Their combined share has grown over 75% since the summer of 2013 in Britain.

But Aldi is already established in the U.S., so how will Lidl lure customers away from Aldi? Perhaps by also attracting customers from Aldi’s sister company Trader Joe’s. It looks like Lidl plans to offer the best of all worlds: the lowest prices combined with the natural foods and unexpected non-food items. A tall order.

Can Lidl do it? New store openings have generated a strong response, but they’ll need to turn initial tryers into long-term buyers.


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