Lidl steps up US expansion with updated store concept

Date : 05 September 2019

We look at how Lidl is pushing ahead with expansion in the US and the changes being made in-store.

Ready to step up expansion

Recent local press reports indicate that Lidl is ramping up the pace of expansion, following more moderate growth over the last year. Last summer, it appointed a new CEO for the business. Johannes Fieber took on the leadership role, having held the same position at Lidl Sweden. Since his appointment, the retailer has opened around 16 stores, growing the network to 70 locations. Over the period, it has also closed two stores.

100 stores by next spring

Over the coming months, Lidl plans on opening new stores in South Carolina, Pennsylvania and New Jersey. These form part of its plans to have around 100 stores trading by next spring. This includes its plan to open its first stores on Long Island, New York, following its acquisition of 27 stores from Best Market last year. While the pace of development has been slower than anticipated, it appears that following a period of refinement, the retailer is set to run with a more aggressive pace of new space growth. Four new stores are opening this month.

Source: Lidl

Evolved look and branding

While the design and footprint of the new stores is like the sites which have been developed over the last two years, there are some notable changes. These include adding the ‘rethink grocery.’ strapline to the front of the store. Previously, there were no exterior signals to consumers that Lidl was a food store.

Source: Lidl

Inside, new blackboard style signage has been added to fresh departments, reflecting a look and feel that is popular in the US.

Source: Lidl

The retailer has also added wooden fixtures in produce and floristry, creating a warmer, market-style environment.

Source: Lidl

Long-term view

Although its entry into the US market has been more challenging than anticipated over the last two years, these changes reflect how Lidl is further adapting its offer to the US market. As one of the world’s leading grocery chains, and privately-held, it is positioning itself for the long-term opportunity. The US hard discount channel remains relatively under-penetrated, although with an ambitious growth plan, Aldi is on-track to operate 2,500 stores in the US by 2022, while Save-A-Lot is also adapting its offer to capture new consumers.

Supplier opportunity

This marks out the channel as a key growth opportunity for suppliers. While private label accounts for most of the product mix at both Aldi and Lidl, national brand penetration is significantly higher at the latter. With the retailer entering a more ambitious growth phase, for many suppliers, it may be an opportunity to revisit their trading strategy with the retailer.

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