USA: What's Next For LIDL US?
- DRC Discount Retail Consulting GmbH
- Jan 15
- 3 min read
Discount Retail Chain Lidl is lacking commitment to the U.S. market. In every other country except the U.S., Lidl either maintains the pace of store openings with Aldi, or Lidl opens more stores than Aldi. Being aggressive against Aldi has paid off for Lidl in terms of growth and market share.
However, in the one country where Lidl should be aggressive, USA, they’ve been conservative. For example, ALDI USA is opening 180 stores in 2026 and will operate 3,200 stores by 2028. By contrast, since 2017, Lidl US has opened less than 200 stores in the USA.
At the moment Lidl is irrelevant as a grocery retailer in the U.S. if Lidl doesn’t become more aggressive, they could decide to depart the USA. Executives from Lidl remain nevertheless convinced that, Lidl will never leave the USA.
If Lidl is to remain in the USA, the parent company of Lidl US, the Schwarz Gruppe, must invest significant amount measuring up to $5B to $10B into the U.S. market in 2026 and no later than 2028 to grow and conquer the market. Nevertheless does Schwarz Gruppe want to invest such amounts in an unprofitable market, when it can invest its money better in new businesses such as Schwarz Digits (for cloud solutions), Schwarz Produktion (FMCG vertical integration) and/or Prezero (recycling).
Looking at Aldi USA, it took them also more than 20 years to make a profitable business unit and let customers adapt to their format. Here the acquisition of Trader Joe's by Aldi Nord was a more clever move, providing immediate positive returns and still being one of the most successful formats in the US ever.
Lidl has exceptional potential in the USA for the following reasons:
Lidl is growing 12% annually
Customers are responding well to fruits, vegetables, and baked goods
Lidl believes its assortment is superior to Aldi
The new food pyramid materially increases the role of fresh produce in the American diet, giving Lidl an edge over Aldi
All of that can be true and still not be enough.
Aldi continues to do what matters most in the USA: opening stores relentlessly and compounding density.
The food pyramid is a tailwind for Lidl, no question. But it’s not a headwind for Aldi. Aldi can pivot assortment, add coolers, and expand fresh at scale far more easily than Lidl can expand its store footprint.
This is the reality Lidl must confront:
If Lidl intends to remain in the U.S. long term, it needs a distribution and density breakthrough, not another assortment debate. Here for an acquisition is required as Schwarz Gruppe has a history of acquisition not cooperation, as this does not fit to the DNA of the German discounters. Similar as Schwarz Gruppe acquired the German REAL Hypermarket, Globus or Familia stores for its Kaufland supermarket retail business, or acquisition of Southeastern Grocers by Aldi USA.
That’s why it is believed an significant acquisition of for example Target is the most realistic game-changer on the table.
Lidl US gets:
Immediate national reach and scale
Nationwide distribution
Scale in USA
Target operates nearly 2,000 stores in the USA only, and most of them can support a discount branded store inside each Target. An accelerated expansion and store remodeling plan could see Lidl operating 1,000 stores by 2028.
Could Lidl US purchase one or more regional grocery chains? Yes, but this would only add 50 to 100 stores to their portfolio. A more forward-thinking strategy, which aligns better with the current Lidl US management, would involve targeting a company like Sprouts Farmers Market.
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