Executive Summary

Lidl will open its first US stores in the summer of 2017 across three eastern states: North Carolina, South Carolina and Virginia. The company is hiring for store-based roles in a total of 38 towns in eight eastern states. This report provides an update on what we know so far, and provides some answers to four questions:

• What do we estimate Lidl’s US sales will be? We see an approximate 1-2-4 step-up in Lidl’s US sales: roughly $1 billion in 2018, $2 billion in 2019 and $4 billion in 2020. These figures presume that Lidl will open just under 100 stores per year in the US.
• What headwinds and tailwinds could Lidl face? Lidl could face headwinds in terms of compromising the quality of store locations in a race for space and diverging from its traditional small-store format. Tailwinds could include increased consumer demand for fresh and natural foods and millennials’ frugality when it comes to shopping for groceries.
• Which incumbent retailers look to be most at risk? Weis Markets and Ingles Markets have the greatest exposure in the eight states in which Lidl is hiring.
• What will Lidl’s US offering look like? We expect Lidl to offer more fresh foods and a substantial general merchandise selection in its US stores, and to push the US provenance of many of the products it offers.