Executive Summary

In this report, we look at three ultralow-price European retailers that have expanded into the US market: Primark, Aldi and Lidl. Here, we examine their market entry strategies and the adaptations they have made in order to operate in an unfamiliar market.

• Primark has taken a highly cautious approach to US expansion, and it has already downsized three of its stores, suggesting that not all efforts have yielded the results it hoped for. However, its global strategy of focusing international openings on glossy, high-traffic flagships aligns with the limited number of store openings we have seen so far in the US.
• Aldi has been highly successful in the US market, but it has built its reputation in the US over four decades. It is now leveraging that accumulated brand awareness and shopper trust with an aggressive expansion plan that is apparently designed in part to undercut Lidl’s move into the US.
• Lidl has clearly faced challenges in the US market. What is notable is that these difficulties have come despite a significant softening of its discount proposition for American shoppers. It now appears to be reverting to a more traditional small-store discount format while seeking to drive traffic by opening stores in shopping centers.
• Worldwide, Lidl has been a tremendously successful grocery discounter, and it has built much of that success on the kind of flexibility it has shown in its approach to US markets. We expect Lidl to continue to adjust its proposition as necessary to win share of the US grocery market over the long term.