Is discount grocer Lidl still planning an Outer Banks store?

By on March 4, 2018

After a highly publicized sale that saw the iconic Kelly’s Outer Banks Restaurant and Tavern site in Nags Head sold to Lidl U.S. Operations LLC late last year, there has been no activity on the site or at the Town of Nags Head offices by the new owners.

The local rumor mill has been hard at work with stories that Lidl, the German-based grocery and retail chain, had either decided to delay the opening of the new store or abandoned the idea altogether.

Deputy Town Manager Andy Garman told the Voice that after polling the town staff, the feedback was that no one had even heard a rumor about Lidl, and added “certainly no plans or applications have been submitted.”

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In many circumstances, this would be considered normal given the sale didn’t close until November of last year, making it almost impossible for Lidl to open in time for the 2018 tourist season, when most grocery stores generate the income to sustain them for the rest of the year.

But the Lidl case is different. National media have been reporting since last October that Lidl’s operations in the United States are in trouble and that the company is scaling back openings, changing strategies and reconsidering the entire U.S. expansion.

In the Sept. 28 edition of Forbes magazine, “Signs of Trouble for Lidl in the U.S. As It Reshuffles Management”, reported that German media had been covering a management reshuffling at the company and reported that insiders had said U.S. sales were “frighteningly weak” in some of the 37 American outlets that had opened at that time.

FoodDive.com, which is devoted to the retail food industry, in January reprinted quotes from an interview with Klaus Gehrig, CEO of Lidl-parent Schwartz Group, that the grocer would scale back planned U.S. openings in 2018 from 50 to just 20 stores.

That would leave just 69 stores open nationwide, well short of the 100 openings the chain had set as June 2018 goal when it first entered the American market.

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Lidl is known for its signature “wall of glass” look. Plans for the Nags Head store (bottom) call for a much more subdued look. (Voice image)

Gehrig said the U.S. stores were too big and expensive to maintain, averaging 35,000 square feet.

By contrast, Lidl’s main competitor is Aldi’s, which also operates the Trader Joe’s brand and builds stores in the 20,000- to 25,000-square-foot range.

Gehrig also said the company has misread American’s unique product preferences, including prepared food items.

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Other critics have cited Lidl’s odd mixture of food and non-food items as confusing to Americans, who prefer their grocery stores to focus on food and kitchen-related items.

Food Dive also cited an unnamed real estate developer who claimed Lidl had already canceled many projects along the East Coast and also said “they were no longer focusing on small markets.”

We were unable to speak directly to Lidl U.S. officials at their Staunton, Va. headquarters, telling us the company only responds to media requests submitted via email.

We submitted questions concerning both the Nags Head store, as well as a planned store announced at the same time in Elizabeth City at Tanglewood, where Aldi’s had also announced plans to open a store.

William Harwood, director of communications, responded:

“Since June, we have opened 16 stores in North Carolina, and the customer response has been very positive. Lidl is also lowering prices for customers in the markets in which (we) operate.

Recently a University of North Carolina study found that other retailers drop prices on individual products by as much as 55 percent on average when Lidl is present in a town.

Customers benefit even more when shopping at Lidl, as our prices were observed to be up to 50 percent lower on average than other retailers in the study.

We are proud to have introduced this positive dynamic for customers in our markets, and we look forward to bringing this impact, and our award winning products, to more communities across the state as we open more stores.

As we have more to share specifically in your area, I will be in close contact.

While Lidl’s responses sheds no light on the status of either the Nags Head or Elizabeth City locations, it may indicate the project is merely on hold while the company reassesses its U.S. strategies going forward, including opening smaller stores and changing its product mix.

Comments

  • Jay

    Correction to a statement : Aldi’s does not operate Trader Joe’s.

    Monday, Mar 5 @ 7:57 am
  • Jay

    Aldi’s does not operate Trader Joe’s.

    Monday, Mar 5 @ 7:57 am
  • dave

    Put a Trader Joe’s in there.

    Monday, Mar 5 @ 8:19 am
  • Perry

    Not surprised at the delay. Also would not be surprised if they sold the land to someone else, and let them hassle with the town.

    Saw a Lidl on my weekend trip to Morehead City, very attractive. Did not shop because of time.

    Monday, Mar 5 @ 9:49 am
  • dave

    Been to Lidl in Virginia. NOT impressed. Jay, I was saying that a Trader Joes should move in; didn’t imply Lidl’s operated them. Lidl is mostly off brand and the packaging is extremely similar to name brand products. The place looked like a small warehouse.

    Monday, Mar 5 @ 11:47 am
  • Greg

    Jay, Aldi does own Trader Joe’s, but it’s a separate division of the company (Aldi Nord) from the one that runs the Aldi stores in the US (Aldi Süd).

    Monday, Mar 5 @ 1:10 pm
  • dave

    Jay, never mind. I thought you were referring to my post. Your statements weren’t posted when I posted my post.

    Monday, Mar 5 @ 1:58 pm
  • surf123

    @Dave everywhere Lidl has gone the other grocers are forced to lower their prices. Some may not like their off-brand or in-house brands, but my experience is that most are as good and about 1/2 the price. The stores are small because they only carry 1 or 2 brands of each product, but they have more than enough to pick from. They may not be for everyone, but most who live here will welcome the competition versus getting jacked by HT, Food Lion, and soon Publix. Lidl’s food are fresh, there are plenty of only marginally higher priced organic products, most if not all of the food is GMO-free and very little, if any, high fructose corn syrup.

    Monday, Mar 5 @ 2:32 pm
  • Xaul Zan

    Wings! Super Wings! Mega Super-Duper Wings!

    Monday, Mar 5 @ 8:27 pm
  • dave

    Surf: You make a good point about Lidl possibly driving down prices. I went to Publix the other day and have to say that I was quite disappointed. The products were mostly the same and the prices were higher on pretty much everything I buy. Harris Teeter drove up Food Lions prices and I don’t know if that wouldn’t hold true with Lidl. One example was that chicken drummies were $4.99/lb at Publix and they’re $3.29/lb at Food Lion.

    Wednesday, Mar 7 @ 8:07 am
  • Steve B

    Lidl will make a great addition to the OBX since big chains have pretty much taken over. The main problem Lidl is having is logistics. They cant get enough product to their stores. They will have an impact on Milk Bread and egg prices.

    Here in Rocky Mount I have been enjoying not having to pay more than 54 cents for a dozen of eggs for over six months now. Boneless Skinless chicken breasts have remained under 1.89. Beef and Pork prices remain low compared to HT, FL, and Walmart. I would not call their house brand products “off brand” they are not. IMO they are top quality. Produce prices are very low as well.

    I still shop Aldi the most, and everybody else about 15% of the time. I think Aldi would have been better suited for the area than Lidl.

    Friday, Mar 9 @ 9:34 am
  • Vicky Reed

    I live in Roanoke, Virginia, and they broke ground at two different locations, started the work, and then we started hearing rumors about financial problems. That was last year, and they have removed all the equipment, locked up the job sites, and we’ve not seen any activity at either of the job sites, so we are in the same boat as ya’ll.

    Friday, Mar 9 @ 11:37 am
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