Lidl willing to lease sites, build smaller stores

Following an initial growth period that fell short of expectations, Lidl once again has a full head of steam as it searches for sites in Greater Philadelphia and beyond. When the German retailer began looking for sites a few years ago, it would only purchase property that could accommodate its 36,000 square foot freestanding prototype.

Now, with some U.S. real estate and operating experience under its belt, the company is employing a more flexible approach. In addition to buying property and self-developing, Lidl will lease space and consider smaller formats.

As reported by winsightgrocerybusiness.com, a Lidl real estate brochure being distributed in the U.S. shows a variety of store formats, including ground floor commercial spaces in urban buildings, and dark supermarket spaces in shopping centers. Store sizes range from 15,000 to 36,000 square feet.

"The brochure is tailored to the U.S. and conveys our openness to different formats and possibilities," said Lidl Spokesperson Will Harwood.

Of the 58 U.S. stores now operating, all share a similar 36,000 square foot prototype, and all were ground up construction. The company's first leased property is scheduled to open soon in Staten Island, NY.

Aldi and Lidl planning shake-up of U.S. grocery landscape

A Wall Street Journal article last month said "the two scrappy German discounters that have wreaked the most havoc in Britain are ratcheting up their U.S. ambitions." The discounters are, of course, Aldi and Lidl.

Aldi currently has over 10,000 stores in 18 countries. (Aldi is actually broken down into Aldi Nord and Aldi Sud, a breakup that occurred in 1960 as a result of a rift over cigarette sales between the Albrecht brothers. Aldi Sud operates Aldi in the U.S. and a number of other countries, while Aldi Nord includes Trader Joe's U.S. stores.) Aldi recently said it would invest about $3 billion into opening new stores in the U.S., and that it plans to increase its U.S. store count from 1,400 to 2,000 by the end of 2018.

The very next day, Lidl, which has over 10,000 stores across Europe, outlined its plans to enter the U.S. market, most likely in 2017 or 2018. As brokers, landlords and real estate developers up and down the east coast know, Lidl has been aggressively pursuing sites for the past year. Lidl is owned by Schwartz Group, Europe's largest retailer.

In Great Britain the success of Aldi and Lidl has contributed to continuing problems - falling share prices, lost jobs and closed stores - for the country's traditional grocers. On the other hand, the success of these discounters has proven to be a boon for consumers in the form of lower prices and more convenient shopping.

The two food retailers "are on everybody's radar in the U.S. today," according to Craig Rosenblum, a retail consultant at Willard Bishop.

With Aldi's aggressive growth plans and Lidl's planned entry into the market, U.S. discounters like Walmart and Save-A-Lot are on notice.

Aldi to open 80 stores in the U.S. this year

Aldi says it will open 80 stores this year, which will give the German company more than 1,200 stores in the United States. (By comparison, Save-A-Lots' goal is 2,400 stores by 2015.) The typical Aldi store is between 11,000 and 17,000 square feet, and that shouldn't change much in the near future. 

However, they do have some new tricks up their sleeve.

Although the company has typically bought property and built freestanding stores, GlobeSt.com reports that Vice President Mike Jessen says they are now looking at leasing facilities in strip malls or enclosed malls as well. In addition, Jessen says Aldi wants to move beyond its traditional demographic by opening locations in affluent areas and food deserts.