Saturday, May 6, 2017

Real estate experts question Lidl's planned store locations

Real estate experts that spoke with Supermarket News last month expressed skepticism over Lidl's real estate choices. Douglas Munson and John Tippetts, former Kroger real estate staffers and co-founders of MTN Retail Advisors, said that about 70% of what they identified as the first 75 stores that Lidl intends to open lack the ingress and egress of a typical "Class A" supermarket location.

In addition, Munson and Tippetts believe that the sites appear to have been selected with a lack of insight into the volume of the competitors in the immediate trade areas.

Site Specialist Matthew P. Casey expressed similar concerns.

"I don't think they evaluated competition beyond doing things like looking at the number of cars in the parking lot," Casey said.

Lidl says that it plans to address quality and price in a manner that existing U.S. markets are not.

Munson predicted that Lidl will attract "the wrong people" and end up being more like a Weis Market or Food Lion rather than a Harris Teeter.

"You have to realize that the average Food Lion is doing $175,000 a week and the average Harris Teeter is doing $450,000. If you assume you're hitting Harris Teeter and you wind up hitting Food Lion, you're taking a much, much smaller piece of the pie."

On the other hand, Mark Thompson, managing director at Crossman & Co., said Lidl's site choices don't surprise him.

"Look what Wawa did in Florida," he said. "They went off hard corners to midblock and where they are at a hard corner it's a 'B' corner, yet all the pumps are full. Their model blew the market away. If Lidl's model blows the market away then people will shop."

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