Grocery Giant Lidl Set for U.S. Opening as Price Wars Escalate

(Bloomberg) -- Lidl, the German grocery giant whose plans for an aggressive U.S. expansion have the industry on edge, is set to begin opening stores in three states next month.

The closely held company, which operates about 10,000 stores across Europe, is preparing to open 20 locations in North Carolina, Virginia and South Carolina starting on June 15. Lidl, known as an efficient operator that focuses on lower-priced, private-label products, plans to have as many as 100 stores on the East Coast by the summer of 2018 and is also looking at sites in Ohio and Texas.

Lidl is expected to add competitive pressure to a grocery industry embroiled in a price war that has been fueled by a record streak of food deflation. Wal-Mart Stores Inc., which generates more than half its revenue from the grocery business, has been cutting prices in a bid to keep its low-cost edge. Aldi, a longtime Lidl competitor is Europe, is also getting ready: the company is spending $1.6 billion to upgrade 1,300 of its U.S. stores.

Lidl, meanwhile, hopes to emulate its European operations in the U.S. The German chain, along with Aldi, has had success entering new markets across the continent, and sees its private-label products resonating with U.S. consumers, many of whom aren’t likely familiar with the brand.

“It’s not the first time we are doing this,” said Lidl executive Boudewijn Tiktak, referring to the company’s expansion into the U.S. “It’s what we do.”

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Lisa Wolfson, Paul Barbagallo