Thursday, May 4, 2017

"Whole Foods’ big new threat: the cheap German supermarkets that conquered Europe"

Aldi Süd and Lidl have been methodically expanding their empires for a while now, I was actually surprised how much more market they have to conquer. In the U.S. Aldi Nord owns Trader Joe's while Süd goes by 'Aldi'.
From Quartz:

American grocery stores are bracing for a German invasion.
Industry researchers say the US market is ripe for disruption, which is one reason two discount grocers from Europe—Lidl and Aldi—are preparing to double-down on their efforts to upend the world of US supermarkets.

“We consider the US a nascent discount grocery market,” according to a new report by Boston Consulting Group. “Discounters have yet to establish a serious presence here and have a market share of less than 15%.”

With that sort of data in hand, Lidl is planning to open its first 20 stores in the US this year, in Virginia, North Carolina, and South Carolina, and expects to add another 80 locations in 2018. At the same time, Aldi is expected to ramp up its 1,300-store US presence to roughly 2,000 locations.

That’s unsettling news for any US grocery chain but it comes at an especially vulnerable time for Whole Foods, which built its brand around quality products but also sky-high prices, and after a run weak sales has only just begun to get serious about competing on price. That battle would have been hard enough to fight against traditional US competitors, which in the meantime have been picking off Whole Foods customers by offering up similar selections—including organic produce—often at cheaper prices. Now it will have to contend with a new batch of rivals with a highly successful track record in other countries....MORE
A couple months ago Supermarket News' headline was "Aldi, Lidl growth to spark industry change".