Amid reports of slow sales, German grocery giant Lidl is dramatically scaling back plans for the U.S. market. The company’s CEO even told a German business magazine that the chain’s move into America was “a single mistake.”
Lidl has opened 48 stores in six Eastern states since entering the market in summer of 2017. The company had planned to open a total of 100 stores by this summer, but new plans call for another 20 to be opened this year.
Locations planned for Virginia, New Jersey, Ohio and Pennsylvania have reportedly been scrapped or abandoned. Construction on a new store in Mooresville, NC has been suspended A company spokesperson says other locations are planned for the coming months in the U.S. but those locations have not been announced.
And the new Lidl stores that do open will be smaller than what American consumers have seen thusfar — the first ones were double the size of their European counterparts.
Klaus Gehrig, CEO of the group that owns the grocery store chain, recently told a German magazine that the U.S. locations are too large and too expensive. He also said the company did not choose locations well and failed to understand American shopping preferences before opening here.
Lidl came on like gangbusters in the U.S. in a challenge to German discounter Aldi, which already has a well-established presence here.
The company’s U.S. debut has not been without successes — a market study released earlier this month by the University of North Carolina-Chapel Hill showed that competitors lowered prices by an average of 9 percent in areas where a Lidl opened.
Lidl operates 10,000 stores in 28 European countries and plans to open 100 in its first year in the U.S. About 90 percent of the items offered are store brands and the company is promising prices as much as 50 percent lower than U.S. competitors.
Last June, Aldi countered Lidl’s coming to America by announcing a $5 billion investment to expand to 2500 stores in the U.S. by 2022. When that project is completed, Aldi will be the third largest retailer in America, behind only Wal-Mart and Kroger.
WHILE YOU WERE WORKING
Here’s what else was going on in the produce world while you were working this week:
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USDA Bans Tampa’s J&R Produce For PACA Violations
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PFK’S ‘Power Your Lunchbox’ Promises To Re-inspire Families In 2018
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Peach Giant Titan Farms Adds New Faces
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