As both German discount grocers aggressively expand into the U.S. market, we’ve noticed strikingly similarities as well as a few stark differences that you should know before heading to either store.
Among the many disruptions and changes we’ve seen in the grocery industry lately, the biggest newcomers are German transplants, Aldi and Lidl. Many people tend to mention them in the same breath, but Aldi currently has a much stronger foothold in the United States with over 1,300 storefronts. Lidl is slowly but surely working their way into the American landscape, with just about 40 stores opening over the summer and with 100 stores planned to debut by early 2018.
Though Forbes reports the German chains could snag up to 7 percent of all grocery business by 2018, there are a few key differences between the retailers that may appeal to American shoppers enthralled by low prices.
Prices at both Aldi and Lidl are among the lowest that consumers at big-box retailers have ever seen – however, when it comes down to brass tax, a price-check analysis by Jefferies & Co. revealed that one of the stores is actually cheaper than the other.
Business Insider reports that Lidl’s prices ring up as 9 percent cheaper than Walmart, 16 percent less than prices at Food Lion, and a whole 3 percent cheaper than groceries found at Aldi.
Jefferies & Co. ran this price check in Winston-Salem, North Carolina, and found Lidl to have the cheapest prices on kitchen staples like lemons, milk, and shredded cheese, and often tied for the lowest price on other items like peanut butter, tomato sauce, green peppers, apples, and grapes.
One of the reasons that Aldi and Lidl have been able to offer products at such low prices is that both stores rely heavily on their own private labels. Despite this, there's a great selection of products at Aldi that are vegetarian, vegan, gluten-free, and organic.
Lidl has a wider selection of brands and products in its stores, with Bloomberg reporting that 20 percent of Lidl’s products come from outside the grocer’s own privately held stocks. Lidl will also source locally for produce and meat products, with many stores indicating where exactly the ingredient was raised or came from.
Aldi has caught the admiration of American shoppers who immediately take to their spacious, clean, and welcoming retail environments – bright colors and vivid branding are a hallmark of Aldi markets.
Lidl turned heads earlier this summer when they announced that they’d be integrating a rotating display of workout equipment, duffle bags, and pressure washers in the middle of their expansive stores, according to a store review posted by Business Insider.
Another distinct difference of the landscape at Lidl is the store’s in-house bakery, where consumers can watch as Lidl bakers bring fresh-baked products to life.
Both Aldi and Lidl sell liquor, beer, and wine. Many industry experts have previously remarked at the expansive, refined collections available at each retailer.
Aldi’s alcoholic offerings are accentuated by seasonal options, known as Aldi Finds, that rotate based on the time of year and what consumers might want to try in a particular season. Aldi’s wines, which range in price from $2.99 to $12, could feature a boxed sangria in the sweltering summer months and a mulled wine in the winter. The same is said for Aldi’s selection of beers, which can set you back anywhere between $6.99 and $12 – but it’s important to note that nearly all of Aldi’s offerings are private label, so it’s not the store for you if you’re looking for a Corona.
Lidl, on the other hand, does carry other brands beyond it’s private label alcoholic offerings – but that’s not to say that you shouldn’t be interested in them, as Lidl won 14 awards for private label wines at the 2017 International Wine & Spirit Competition in London. The retailer prides itself on a rather massive selection of wine that is color-coded for shoppers to navigate through. Each store is different, but Business Insider says Lidl supplies over 120 varieties of wine, and more than 100 options are manufactured in-house.
Initial Growth Might Give Aldi The Advantage Over Lidl
While both Lidl and Aldi seem genuinely promising for the American consumer, a recent report by the Wall Street Journal cites that Lidl lost more than 2 percent of traffic in its operating U.S. stores since they launched in June. Apparently, in regions where traditional legacy grocers like Kroger are operating, Lidl saw some of their initial customers defect once more.
Some experts say its too early to forecast Lidl’s success in the market thus far, but it’s a telling sign for the competition that Lidl faces – beyond it’s German counterpart, Aldi. As Lidl works their way into regions across the country where Aldi might already be in operation, one thing is clear – shoppers have certainly taken notice.