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Kennedy: Lidl enters the U.S. grocery fray

Kennedy: Lidl enters the U.S. grocery fray

We couldn’t agree on the fresh-baked aroma. Daughter No. 1 thought brownies; my bet was chocolate chip cookies.

No matter, it invited us into the Lidl store in suburban Virginia — just as the German supermarket chain intended.

Lidl (rhymes with “needle”) entered the competitive U.S. grocery fray in mid-2017, promising 100 stores along the East Coast in a year’s time. That didn’t happen, though, and heads rolled as a result.

Now, with new U.S. executives, the acquisition of a grocery chain on Long Island, and a just-released list of additional locations, Lidl expects to hit the 100-store mark by the end of next year.

Lidl is a hard discounter akin to Aldi, one of its chief rivals. Prices are low, the selection is mostly private label and limited, and you have to pack your own purchases.

But meat, produce, award-winning dairy, and canned and packaged foods are there — along with rotating general merchandise specials. At the store we shopped last Sunday, that included $12.99 hedge trimmers and $99.99 Singer sewing machines.

Although Lidl lacks a butcher or deli counter, its near-the-entrance bakeries churn out breads and rolls, muffins and doughnuts, and those invitingly aromatic cookies (or brownies).

Daughter No. 1, who indulged my request to see a Lidl while visiting over the Memorial Day weekend, remarked on the lower prices of some of the products she typically buys.

But the store wasn’t close enough to where she lived or worked to become her go-to market.

While focus on price made Lidl a disruptor in Europe and elsewhere, that won’t happen here, says one retail consultant, since U.S. competitors “are willing to sacrifice margins to maintain market share.”

Writing last summer in Forbes magazine, Brittain Ladd, who has worked on supply-chain strategy for Dell, Michaels Stores and Amazon, suggested Lidl needed to make “a big move” to surprise competitors.

Two of the ideas he offered then have come to pass: buying a smaller grocery chain and hooking up with online bulk retailer Boxed.

Ladd told me this week that the acquisition of the Best Market stores on Long Island, completed in January, “helped send the message that Lidl was serious about accelerating its growth.”

But with rival Aldi way ahead on store count, Ladd thought Lidl should also look at other acquisitions, such as discounter Family Dollar, whose 2015 combination with Dollar Tree has been troubled. Family Dollar has more than 8,000 stores.

Mirroring another idea advanced in Forbes, Lidl and Boxed announced a partnership this month. Ladd told me that was “a great strategy” because it will let Lidl offer customers something Aldi doesn’t: Boxed’s in-home or office delivery of bulk-sized purchases.

And since Boxed also is a “leader in technology,” Ladd said the partnership may “create capabilities that will continue to differentiate Lidl in the marketplace.”

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]

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