Has Lidl's U.S. expansion hit a snag?
Lidl has put a hold on construction of its New Jersey store, as well as on proposed locations in other states, according to a published report. The German deep-discounter’s first store in the Garden State opened in Vineland last month.
The second was to be in Mantua Township, in Glouscester County, but that now appears to be up in the air. The South Jersey Times reported that the company informed Mantua officials that the project was stalled because of “budgetary constraints,” citing the township’s economic development coordinator, who added that Lidl was working on reducing costs so it could proceed with construction. Mantua has been without a grocery store since 2013.
Mayor Pete Scirrotto told the Times that township and Lidl officials would meet in the next few weeks to discuss possible incentives, among them a tax abatement plan. Mantua is also looking into any assistance the county and state could provide in restarting the project.
READ: The waiting game
The newspaper further noted that Lidl’s plans to open stores in Staunton, Va.; East Lampeter Township, Pa.; and Austintown Township, Ohio, had apparently been abandoned.
When contacted by the Times, Lidl spokesman Will Harwood declined to comment on the Mantua project, but asserted that the grocer would be opening “a number of sites” in New Jersey. According to the newspaper, locations of future Lidl stores would be in Burlington, Camden, Cumberland and Monmouth counties.
"We are looking at a number of sites across our markets along the East Coast and are not addressing each individual one at this time outside our normal course of store announcements," Harwood subsequently told Progressive Grocer. "However, a real estate portfolio that includes several hundred sites, which is what we have, requires constant evaluation and optimization -- that would certainly be true for Lidl in any country. We have opened 47 stores built from the ground up in less than six months. This is impressive and perhaps
In October, after reports that it was scaling back store expansion plans in Georgia, the company told PG that the Peach State was “absolutely still a focus,” and that it looked forward to new store openings there, but declined to provide further details.
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Despite opening its first U.S. stores last summer to great fanfare, the chain hasn’t lived up to early predictions of record-breaking success.
“Call me a cynic, but I get suspicious of any company, regardless of their success abroad, that’s so confident of victory they’re shopping for real estate halfway across the country before they’ve even opened the doors on their first locations, which happen to be in some of the most competitive, overstored grocery markets in the country -- a country where its biggest historic rival has had a 40-year head start,” wrote PG editorial director Jim Dudlicek in a recent blog post, noting that the novelty of Lidl’s upscale limited-assortment concept seemed to have worn off for consumers after a few months.
“Lidl will have to start adapting quickly if it intends to live up to the lofty expectations thrust upon it by most pundits in the months leading up to its U.S. launch,” said Dudlicek.
A version of this article appeared at ProgressiveGrocer.com