A European discount grocer with plans to expand in the U.S. could pose a "formidable" threat to grocers like Publix Super Markets Inc.
Lidl chose the metro D.C. region over downtown Charlotte for its U.S. headquarters, reports the Washington Business Journal, a sister news organization. It will open a distribution center in Spotsylvania County, Virginia, according to Supermarket News, an industry trade publication.
Lidl could open 100 stores in the U.S. initially with stores to open no later than 2018, unnamed sources tell Supermarket News, though that number hasn't been confirmed.
"As always, competition is fierce in the U.S. and success will not come easy. But Lidl should be treated as a formidable threat," writes Neil Stern, an industry analyst with McMillanDoolittle in Chicago.
Based in Germany, Lidl's stores are similar to Aldi US, another German grocer that's been growing rapidly in the U.S. for the last few years. The stores offer a small selection of groceries — the majority of which are its private label — at a discount to most other grocers. The similarities to Aldi, Stern writes, could make it easier for Lidl to make headway in the U.S.
Competition for Lakeland-based Publix has never been more fierce: In addition to discount stores, specialty grocers like Trader Joe's and Whole Foods Market Inc. are expanding. Customers are also spending more money on restaurant food than ever before, and meal-kit delivery services also have the potential to take a bite out of grocers' market share.