Director, Retail Insights
Looking at Lidl's disruptive potential, as we glimpse its first wave of US stores
It is no secret that Lidl has been working aggressively for some time toward officially launching in the U.S. in 2018. It is incredibly rare of a retailer of this scale — with this much disruptive potential — to enter this market with so much advance notice.
The German discounter has opened U.S. offices and a quick look at the Lidl careers website shows store-level job listings for on-the-ground, shopper-facing supervisors and managers. That gives us our first glimpse of where Lidl’s first wave of stores will be in the U.S. Everything between New Jersey and Georgia is in play, and the metro markets where it has chosen to focus demonstrates just that.
And this gives us a sense of the retailers that will compete with Lidl on a market-by-market basis.
| City or County | State | Key competitor in market (# stores) |
| Augusta | GA | Dollar Tree (48), Dollar General (44), BI-LO (15) |
| Prince George's County | MD | Independents (172), Dollar Tree (124), Giant Food (117), Safeway (96) |
| Charlotte | NC | Dollar Tree (145), Independents (116), Food Lion (106), Dollar General (104) |
| Raleigh | NC | Food Lion (62), Dollar Tree (55), Independents (37) |
| Winston-Salem | NC | Food Lion (62), Dollar Tree (55), Independents (37) |
| Burlington County | NJ | Dollar Tree (231), Independents (119), Acme (87) |
| Reading | PA | Dollar Tree (18), Dollar General (15), Redner's (10) |
| Columbia | SC | Dollar General (59), Dollar Tree (47), Food Lion (42) |
| Greenville | SC | Dollar General (80), Dollar Tree (62), BI-LO (31) |
| Spartanburg | SC | Dollar General (42), Dollar Tree (18), BI-LO (11) |
| Culpepper | VA | Independents (172), Dollar Tree (124), Giant Food (117), Safeway (96) |
| Norfolk | VA | Dollar Tree (106), Food Lion (86), Dollar General (52), Supervalu (46) |
| Richmond | VA | Dollar Tree (74), Food Lion (57), Dollar General (49) |
It is immediately clear that Lidl will impact a wide array of retailers, and while they are all likely to feel some pressure, they won’t all feel it equally. For instance, while Dollar Tree has heavy store concentrations in many of these markets, its specific value proposition largely shields it from Lidl’s potential impact. Can we say the same about Food Lion? Maybe not, but time will tell.
We know where the stores will likely be. We have a rough idea of when they will open. We even have a sense of what the stores may look like. Some might ask, “What about Amazon? It’s highly disruptive.” That’s true, but Amazon’s rise has been a slow burn over the last two decades. Lidl’s disruption is likely to be more abrupt. Tesco’s Fresh & Easy stores came to the U.S. with a lot of hype, but the scale of the rollout was much smaller. The manner in which Lidl’s arrival is unfolding is unique, and provides the retail community with a rare opportunity to be proactive and stay on the proverbial front foot. Indeed, those that do are more likely to manage (and even grow) in this rapidly changing environment, while those that don’t will find an already challenging space even harder to navigate.
We know where the stores will likely be. We have a rough idea of when they will open. We even have a sense of what the stores may look like. Some might ask, “What about Amazon? It’s highly disruptive.” That’s true, but Amazon’s rise has been a slow burn over the last two decades. Lidl’s disruption is likely to be more abrupt. Tesco’s Fresh & Easy stores came to the U.S. with a lot of hype, but the scale of the rollout was much smaller. The manner in which Lidl’s arrival is unfolding is unique, and provides the retail community with a rare opportunity to be proactive and stay on the proverbial front foot. Indeed, those that do are more likely to manage (and even grow) in this rapidly changing environment, while those that don’t will find an already challenging space even harder to navigate.
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