Germany’s Lidl plans to open its first U.S. stores on June 15, beginning a rollout that will eventually carry the chain that promises deep savings over existing stores’ offerings into Philadelphia and its suburbs.
Lidl’s initial U.S. locations will be in South Carolina, North Carolina, and Virginia, Brendan Proctor, president and chief executive of the store’s U.S. operation, said at a Tuesday evening news event in New York to introduce some of the chain’s merchandise.
Lidl (rhymes with “needle”) will open a total of 20 stores in those three Southern states, with 80 more shops – including ones in and around Philadelphia – expected to begin operating by mid-June of 2018, Proctor said.
“We have sites secured from New Jersey down to Atlanta,” he said. “We’re agile as a retailer. We’re able to adapt. We learn from the markets we’ve gone into.”
Lidl Stiftung & Co. KG, a unit of the Schwarz Gruppe grocery conglomerate, operates about 10,000 stores in 27 countries, where the 44-year-old chain is best known for its low prices.
Even before its U.S. opening, the company seems to be having an impact here.
Wal-Mart Stores Inc. chief executive Doug McMillon said in a Wall Street Journal article published this week that the Bentonville, Ark.-based retailer is refining its lineup of store-brand products and lowering some prices ahead of the expected onslaught by Lidl and other competition.
Indeed, Lidl is seen to be eyeing Philadelphia-area sites in close proximity to Wal-Mart stores, including locations in the city’s Port Richmond neighborhood and in Cherry Hill.
The company has confirmed no particulars about its plans for Southeast Pennsylvania and South Jersey, and Proctor declined to discuss when stores in the area might open, citing uncertainty over permitting processes and other issues.
But he did share a few details about the chain’s general approach, saying about 90 percent of stores’ inventory will be “private label” merchandise that vendors produce specifically for Lidl, with remaining inventory coming from known brands.
The chain will also periodically introduce nonfood items for short-term sale to sustain customers’ interest, Proctor said. Sample “Lidl surprises,” as they are known, could include yoga pants, lawn mowers, and leather jackets, he said.
Food will be about 85 percent U.S.-made, with the rest imported largely from Europe. A selection of these goods – presumably making up some of the chain’s higher-end offerings – were on display for reporters Tuesday.
Arrayed were cheeses that had recently won a string of awards at a Los Angeles competition, and smoked salmon and scallops that were certified to have been sustainably raised, as Lidl officials said all the company’s seafood will be.
Also on display were U.S.-cured salamis that were produced following European methods (lower heat for longer periods) and Italian- and Spanish-made Prosciutto di Parma and Serrano ham.
“Everybody’s a foodie now,” said Food Network regular Amanda Freitag, who spoke at the event, for which she prepared snacks using Lidl products. “It’s really important to give people access to high-quality products at decent prices.”
Proctor said Lidl is able to do that through practices it has refined over decades.
Some of its cost savings are achieved by limiting the assortment of items on its shelves to just a few variations, most of which were developed in close collaboration with vendors, Proctor said.
A similar approach is taken by Aldi Inc., another German discounter against which Lidl already competes at home and in other markets, as well as by Trader Joe’s, which is also run by a German parent.
Proctor said that another of Lidl’s money savers is its standardized approach to its operations, with all of its U.S. stores to be of a near-identical design, with just over 20,000 square feet encompassing six aisles.
The company is also fanatical about eliminating waste, he said: Bread arrives at the store partially baked and frozen and is prepared fresh throughout the day as needed, to keep loaves from going stale and being discarded. Produce is kept fresh by rotating pallets from the bottom up, rather than arranging them in bins, so that older fruits and vegetables are not left to linger.
“We try to work with a model, with a system,” Proctor said. “We measure everything.”