Lidl had hoped to have about a hundred stores in the United States by the summer, but will be forced to adjust its first-year goals. The German chain currently has 49 stores in the United States.
2 billion euro
Lidl was very enthused in the first few months and expansion was ahead of schedule, but local politicians and real estate developers have now stated that several planned stores have been put on hold or even scrapped. Lidl already spent more than 2 billion euro to achieve its American expansion, according to German Handelsblatt.
Lidl has probably underestimated the highly competitive US market, which is in a intense price war at the moment. Amazon’s Whole Foods acquisition has only made the market even fiercer.
The German store chain has altered its approach already. At first, it opened stores with, on average, 2,000 sqm, but it is now actively looking for locations with at most 1,400 sqm. Previously, it also wanted to have stores on easily-accessible roads, but it now targets densely-populated urban areas.
Lidl is also struggling to convince the American customer, because a discount chain with mainly private labels is not something that immediately appeals to an American consumer.
Nevertheless, the competition fears Lidl. Everywhere it opens a store, Walmart drastically lowered its own prices. In some cases, prices for certain products dropped more than 50 % compared to when there was no Lidl in the vicinity.