Here’s some bad news for local supermarkets: A new survey has found that consumers of all incomes are eager to try shopping at Lidl, the European discount grocery chain that is opening stores across North Carolina this summer — including one in Wake Forest.
Overall, two-thirds of the 508 consumers in North Carolina, South Carolina and Virginia that responded to the survey conducted by management consulting firm Oliver Wyman reported that they are likely or very likely to sample Lidl’s wares.
Moreover, the survey results debunked the conventional wisdom that Lidl stores will appeal primarily to low-income shoppers, said George Faigen, a partner in Oliver Wyman’s retail and consumer goods practice.
Instead, 49 percent of consumers from households with an annual income in excess of $75,000 reported that they are “excited” to try Lidl, on par with the 48 percent of consumers from households earning less than $25,000 who are eager to try out the stores.
Wyman said that the results of the survey, which was limited to consumers who were aware that a Lidl store was coming to a location near them, show that Lidl will provide stiff competition to entrenched supermarkets across the board.
Lidl, one of the world’s largest supermarket chains with more than 10,000 stores in 27 countries, is opening its first 20 U.S. stores in North Carolina, South Carolina and Virginia this summer. Within a year, Lidl expects to have 100 U.S. stores.
“Their entry into the U.S. is more likely to be successful than not,” Faigen said.
Lidl is one of several new supermarket brands that are invading the Triangle market. Others include Sprouts Farmers Market, which opened in North Raleigh in March, and Wegmans, which has unveiled definite plans for four area stores. In addition, Publix, when first entered the market in 2014, has been expanding aggressively.
Faigen noted that although it is notoriously difficult for supermarket chains to succeed in multiple countries, Lidl has succeeded in every market where it has expanded with one exception: Norway.
“Lidl isn’t bullet-proof,” he said. “They have failed once.”
Lidl is what is known in the industry as a “hard discounter.” It offers low prices and the convenience of smaller stores, which also means fewer products to choose from.
“You’re not going to have 15 peanut butters,” Faigen said. “You’re going to have three. That makes sense to you because you’re only going to buy one of them anyhow.”
Lidl sells mostly private-label brands that are designed to be the equivalent, if not better than, the national brands at prices that are significantly lower, he said.
The chain’s challenge is that its private-label brands are unknown to U.S. consumers, so it can only succeed by getting shoppers to give them a try.