Why Both ALDI and Lidl Pose a Threat to Grocers Across the U.S.

With the news of ALDI’s proposed acquisition of Winn-Dixie and Harveys Supermarket, the industry is taking a closer look at the retailer’s effects on the U.S. market. A new report from dunnhumby details how the tie-up could change the retail landscape for shoppers and grocers in the Southeast, and also how ALDI’s competitor Lidl factors into the equation moving forward.

Although ALDI is the 13th largest grocery chain in the U.S. market, the company has grown more than the 40 largest grocers in the country since the end of 2020. ALDI is still far from having a foothold in the Southeast market, but by expanding its management of other types of grocery offerings, dunnhumby asserts that it’s diversifying and opening itself up to different destinations in a shopper’s grocery ecosystem.

The Winn-Dixie acquisition could also bring better savings, product options and omnichannel experiences to customers, but it should also raise alarm bells for grocers throughout the country. According to dunnhumby, retailers everywhere should be closely examining their private brand, assortment, digital and real estate strategies to protect themselves from an uncertain future.

When it comes to fellow German discount retailer and ALDI competitor Lidl, it holds only 0.3% of U.S. grocery market share, but only arrived on American soil in 2017. Lidl is gaining a foothold in the East, and recently announced that it will open its newest location in New York City’s Bronx Terminal Market, which is located along the Major Deegan Expressway.

Further, the grocer has been focusing on store performance and potential with a round of store openings and closings, including some in the same market. Lidl welcomed shoppers to a new location at 3005 Martinsville Road in Greensboro, N.C., on June 28, but the company shut another store in nearby Thomasville on July 16.

Lidl also recently welcomed a new U.S. CEO when Michal Lagunionek stepped down from his position. Lagunionek’s U.S. replacement will be Joel Rampoldt, a Miami-based retail and wholesaler consultant who is new to the company. Lidl confirmed to Progressive Grocer that Rampoldt will assume the CEO position in September.

While ALDI still holds an edge over Lidl in base prices, store experience, assortment relevance and a superior natural/organic product selection, dunnhumby still believes Lidl could have a bright future in the United States if it increases its focus on personalization and market communications. 

Operating about 2,200 stores in 38 states, Batavia, Ill.-based ALDI U.S. employs 45,000-plus associates and is No. 26 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company one of its 10 Most Sustainable Grocers. Arlington, Va.-based Lidl runs about 170 stores in the U.S. and is No. 91 on The PG 100.