e are actively pursuing sites across the Mid-Atlantic, from Pennsylvania and New Jersey down to Georgia,” Will Harwood tells me as we discuss the buzz about Lidl’s expansion into the U.S. The competitive retail space may have its challenges here in the states, but Lidl’s even more competitive pricing strategy is one of the many components that will help it to adapt.
And the company isn’t shy in telling you exactly what it wants out of the perfect locale. With a listed requirement of at least 3.5 acres to accommodate a 36,000-sq.-ft. stand-alone store with a minimum 150 dedicated car parking spaces and a signalized, full access intersection with high-visibility preferred, on a site positioned in an established retail location, Lidl US has created a business strategy that has been analyzed and revised down to the last detail. You can add a dense population area within three miles and traffic counts of more than 20,000 vehicles per day to that list of requirements as well. Currently, with 10,000 stores in 27 countries, that strategy seems to be working.
While still in the early stages of U.S. expansion, the company is already building its vendor base across the country.
“We work directly with suppliers, and are always interested in connecting with like-minded partners and a broad range of companies who share our commitment to quality,” Will adds. “What we hope for is to grow a great supplier base with companies who want to grow with us as we expand.”
It has been important for Lidl US from the get-go to have those direct relationships with suppliers, to understand the supply chain, and build the relationships necessary to not only build toward success, but to ensure it. Lidl US’ centralized distribution model allows the company to cut down on travel costs for a shorter, quicker supply chain, which is why the company took this approach. In addition, Lidl US’ long-term contracts allow the company to spend less time on negotiations, and more energy on executing a diverse product base with high-quality products at what the company considers incredibly low prices.
“Our produce experts assess each supplier on a case-by-case basis,” Will tells me. “We welcome communication from all suppliers, regardless of size, who are interested in working and growing with us as we expand. If suppliers have specific certifications, such as Organic or Fair Trade, we're eager to hear about it, and factor that into our decision making as appropriate.”
“What we hope for is to grow a great supplier base with companies who want to grow with us as we expand.”
- Will Harwood
Along with a treasured vendor base, Lidl US is also committed to the highest standards of social and environmental responsibility and ethical conduct. Among those efforts from supplier-partners are that they must provide safe working conditions, treat workers with dignity and respect, conduct business in a fair and ethical manner, and use environmentally sustainable practices at all locations from which they supply products or perform services for Lidl US Don’t believe me? Check out the company’s Code of Conduct. Lidl US has developed this Vendor Code of Conduct to encourage the goal of improving social and environmental standards practiced by the company’s vendors across multiple countries.
“As a concept, we are building on the foundation that has made Lidl successful in Europe while creating a unique shopping experience for customers in the U.S. that is unlike anything in the market,” Will says.
For more than 40 years, Lidl has been a growing presence in the European grocery marketplace but has a history dating back to the 1930s, when the company was founded in Germany as a grocery wholesaler. The first Lidl stores were opened in 1973 and as the company entered the 1980s, it was establishing itself as a household name throughout Germany. Lidl started to open stores outside Germany during the 1990s, and today Lidl stores can be found in nearly every country in Europe. Since establishing itself in the U.K. in 1994, Lidl has grown consistently and always with the goal of continuing to play a major role in the exploration of new markets in Europe and beyond.
Will adds that, at the core, “Our expansion is driven by our belief that Lidl will be a great option and shopping destination for customers here. We are committed to delivering the highest quality products at the lowest possible prices, and this promise will apply not only to our produce selection–which will be robust—but also to our entire range.”
"We are committed to delivering the highest quality products at the lowest possible prices."
- Will Harwood
In addition to the upcoming U.S. launch, the company has broken ground on three regional headquarters and distribution hubs, having selected Alamance County, North Carolina, for its new $125 million operation. Lidl US has also chosen Arlington County, Virginia, for its U.S. headquarters, and Spotsylvania County, Virginia, for a second regional headquarters and distribution center. The grocer is spending more than $202 million on those facilities in Virginia.
“We are confident our offering will be very attractive to customers in the U.S., and we look forward to introducing them to a unique shopping experience and expanding organically to meet demand for our stores,” Wills adds.
Lidl’s move into the U.S. market comes on the heels of the accelerating expansion of ALDI here in the states. Both, U.K. powerhouse retailers. With ALDI planning to operate approximately 45 California stores by the end of 2016 just here in our home state, and more than 2,000 stores nationwide by the end of 2018, we will be sure to keep our finger on the pulse of all things grocery.
For Lidl, entering such a competitive retail space, is all in the planning. Having the right team to execute the company’s initial roots in the U.S. is essential.
And it’s roots that Lidl US is aiming to grow now, and growth it seems, we have in store.