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Lidl Could Have Big Impact On U.S. Retailing

greg sleterMusic in America during the 1960s forever changed when the Beatles led a host of bands from the U.K. to the U.S. in what would forever be known as the British Invasion.

Today, the supermarket segment is facing a European invasion of its own as German grocery chain Lidl sets up shop in the U.S. with its first stores in the mid-Atlantic region.

At a time when many have deemed this era of retail an “apocalypse,” Lidl is seeing an opportunity to expand its discount grocery model to American shoppers. Current plans call for the company to open upwards of 100 stores by the summer of 2018. The presence of Lidl and the continued expansion of its fellow German grocer, Aldi— with its 1,600 U.S. locations— will undoubtedly create some upheaval for existing supermarket chains and other retailers such as Walmart that are deep into consumables.

While new players entering a marketplace, even one as large as the U.S., is always cause for consternation among existing players, competitors of Lidl and Aldi should take a lesson on the successes of both.

What is clear with the two German grocery chains is that both are focused on simplicity, high value, and private brands. The first two serve the needs of consumers who want an easy shopping experience while saving money. The latter allows each retailer to offer products that shoppers can’t find elsewhere.

It’s the same format that has allowed Trader Joe’s to succeed in the U.S. and led consumers to clamor for the chain to open in their neighborhood.

While Lidl and the future growth of Aldi, which wants to have an additional 900 U.S. stores by 2022, will shake the foundations of some chains, their presence will up the competition and ultimately be good for retail as a whole.