German supermarket chain Lidl might be making its move on the US in 2015, following the example of its sector rival and fellow German company, Aldi: starting on the East Coast using shops with a limited range of cheap products, in the vicinity of large retailers.
“Copying Aldi is safer”
Formally speaking, Lidl is still performing a feasibility study on the possible entry on the American market. The study should be completed by the end of 2014 or early in 2015, but according to director of Planet Retail, Matthias Queck, the decision has already been made, meaning the German distributor will soon start operating in the US. The plan would be to open a hundred shops in the US in 2015.
Queck says it is probably safer for Lidl to copy Aldi, which has been active in the US since 1976, than to test out a new concept on an unknown market. Furthermore it seems the time is right to bring the discount concept to the American market.
US needed to keep growing
Because of the crisis, discount is no longer seen as just an alternative. There is also not so much competition in the segment of ‘supermarkets with a limited range’.
The expansion to the US is also becoming a necessity for Lidl to keep on growing: in 26 European countries the market is reaching its point of saturation. For a new development on the long term, new markets need to be opened up. The US is being preferred over countries as Russia, Turkey and Brazil, because of greater political stability and legal security.
In 2003 the company had plans for Canada, but they were cancelled, partly because they found it difficult to acquire decent properties. That is probably why the current study is being performed by CEO of Lidl Ireland, Kenneth McGrath, and his real estate director, Kevin Proctor.
Rival Aldi currently has 1,500 locations under its own name and the name of Trader Joe’s in the US.