Why is Lidl closing stores? Due to unsafe building conditions, Lidl is closing a few of its U.K. locations. The business will also be establishing new locations nationwide this year. New ones completely replace some locations, while others will close their doors forever.
A global discount retail chain based in Germany is called Lidl Stiftung & Co. K.G. In Europe and the U.S., it has more than 12,000 outlets. In Ludwigshafen, Germany, the first trendy Lidl store opened in 1973. The modest start of their international expansion was this tiny store with just three staff members and about 500 items. In the 1990s, the company began building outlets outside of Germany. Within a few years, they had spread across all of Europe!
Lidl established its first U.S. store in 2017 but failed to make an impression. The German discount chain’s shop expansion has been slower than anticipated. In the U.S., after more than five years, it has less than 200 locations. Let us view the business in detail in this article.
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History of Lidl
When Josef Schwarz joined the wholesaler of tropical fruits known as Lidl & Co. in the 1930s, Lidl was first established. He changed it into a wholesaler of groceries. Despite being destroyed in 1944 due to the Second World War, the company was rebuilt ten years later.
Dieter Schwarz, Josef’s son, was born in 1939. After graduating from high school, he started working for the business. However, the younger Schwarz did not restructure the business until decades later, in 1973. Inspired by Aldi’s success, he launched the company’s first discount store in Ludwigshafen-Mundenheim.
According to Bloomberg, he purchased the Lidl name’s rights. He could not give the company its German name, “Schwarzmarkt,” which means “black market.” The shop carried about 500 product categories.
When Josef Schwarz passed away in 1977, Dieter Schwarz became the new business chairman and CEO. Lidl’s growth was quick. It employed roughly 5,700 people and had over 450 outlets in Germany by 1988.
The following year, it grew internationally. The first Lidl store outside of Germany was located in France. Soon after, it started opening stores in other parts of Europe, such as Italy in 1992 and the U.K. in 1994. In Europe, Lidl employed more than 80,000 people by 2003.
The retailer introduced Lidl Asia in 2006. It is a sourcing division for the business, which employs more than 1,000 people in Bangladesh, China, and Hong Kong. Although Lidl has no shops in Asia, its duties include production, quality control, and shipping.
The Schwarz Group includes Lidl and Kaufland, a related firm. Schwarz established a chain of hypermarkets in the 1980s. More than 1,500 Kaufland locations exist in Europe, with over half of those being in Germany. Neckarsulm is where Lidl is headquartered.
In 2009, Lidl opened an online store. Since then, it has released a mobile app where users can use coupons to save money in-store.
Lidl’s U.S. launch
In 2017, Lidl began operations in the U.S., its sole market outside Europe. The retailer was compared to a hybrid of North Carolina-based grocery chain Harris Teeter and Trader Joe’s in a company presentation before its U.S. debut.
In the summer of 2017, the first 20 Lidl locations opened in Virginia and the Carolinas. Analysts had high hopes, but the U.S. launch took longer than anticipated. According to Forbes, the company only opened half of the 100 outlets it had planned to open in its first year of business.
However, the business has been increasing its speed. Lidl acquired 27 Best Market locations in New York and New Jersey, which it later renovated. The company promised to provide its employees with “equal to or better than” the salary and perks offered by Best Market and job security.
In the summer of 2018, the first Lidl store in New York opened on Staten Island. Early in 2022, Harlem saw the opening of its first Manhattan location. It will open its first Brooklyn location in 2024.
Food & Wine Magazine ranked Lidl as the sixth-best supermarket in the nation in 2020. Also, Lidl claimed that in just three years, it had received more than 500 awards for its distinctive goods and shopping experience.
As of May 30, 2023, 178 Lidl stores operated in the USA. Virginia has 34 stores, or nearly 19% of all Lidl stores in the U.S., with the most Lidl outlets.
Lidl might follow in the footsteps of Aldi
In 2017, Lidl launched its first location in the U.S., but little has come of it. Lidl wants to imitate rival German supermarket store Aldi’s success. In 1976, Aldi launched its first U.S. location; today, it operates 2,200 locations across 38 states.
For the third year in a row, Aldi was the grocer in the U.S. with the quickest growth rate in store count, trailing only Kroger and Walmart. It is according to the real estate firm JLL. Students, bargain hunters, and middle-class customers all adore the chain.
Like Aldi, Lidl’s business focuses on cost-cutting to keep prices low. Stores are kept small to maximize efficiency; goods are sold directly from delivery boxes, and non-essential services are avoided. Customers may increase for discount retailers like Aldi and Lidl as the U.S. prepares for a recession.
Lidl closing its stores
Due to poor construction conditions, Lidl is closing some of its U.K. locations. It said it will also be adding new locations this year.
Over 950 Lidl supermarkets can be found in the U.K. But the company declared earlier this year that some of its locations are “unfit for purpose.” It is due to the poor condition of their structures. The supermarket shut down three U.K. locations in May, with at least one more closure planned for this summer.
According to a statement by Lidl, new stores may open in the next few months. It is even though some locations are closing permanently and others are moving. The company said that positions at alternate sites would be provided to employees from the affected branches.
Yet, Lidl is not the only grocery store making closure announcements this year. Other corporations, like Iceland and Argos, have confirmed the closure of several locations this summer.
Lidl outlets are closing in the summer
This summer, The Quadrant in Redditch will close; the company has not yet announced the precise date. After opening a new location on Battens Drive in Redditch last summer, the Lidl store in The Quadrant in Redditch town center, close to Birmingham, is closing.
The past few years have been difficult for everyone, but Lidl GB CEO Ryan McDonnell stated:
“We’ve made it plain that we’re more focused than ever on ensuring that every home has access to a Lidl store.”
“We continue to expand and invest in our infrastructure and look for new sites and locations nationwide. But our focus is clearly on the future.”
Lidl stores closed list:
The list of Lidl stores that have already closed this year is as follows:
- On April 30, Drayton Road in Mile Cross was closed.
- On May 28, Sturry Road in Canterbury was closed.
- On May 28, Forton Road in Gosport was closed.
Following the start of 15 new locations in 2023, Lidl declared that the company is witnessing “record growth” this year.
“Over 1.4 million new customers came to us from our competitors last year,” Ryan McDonnell continued. This alone demonstrates the potential for continued expansion. Consumers are unwilling to pay more for their purchases when they know that Lidl offers the same, if not better, quality.
“We anticipate that more consumers will move as 2023 progresses.” They know that no matter which of our stores they select, they are getting the best deal.”
Conclusion
Two thousand twenty-one sales for Lidl were 100 billion euros ($107 billion), a 4.7% increase over the prior year. With 340,000 employees, it operates more than 12,000 outlets in 31 countries. Aldi, a discount competitor, has over 11,000 outlets between its two companies. It generated over 89 billion euros ($94 billion) in net revenues 2021.
Although Lidl hasn’t made a splash in the U.S., its more than 900-store U.K. operation is booming. With a 7.4% market share in groceries, Lidl is the sixth-largest supermarket in the U.K., per data from Kantar. With over 3,200 locations in Germany, Lidl employs roughly 93,000 people.
Lidl is undoubtedly a fantastic option for many clients who want high-quality goods at reasonable prices. Several countries have seen success with it. It has, however, struggled against established rivals in the United States. Also, it has been unable to reproduce its economic strategy there.
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