Walmart Could Be in Trouble Because of Another German Discount Supermarket

Mike Pomranz
Updated
The American superstore might have its prices undercut when Lidl opens.

Walmart – long the bane of small “Main Street” mom-and-pop shops – may potentially be running into competition problems of its own. Last week, Reuters reported on how German discount supermarket chain Aldi had declared a price war against America’s largest retailer. Then today, more bad news from a major source: The Wall Street Journal reports that another four-letter German discount supermarket, Lidl, will be entering the US market this year and has also put Walmart directly in its sights.

Granted, Walmart is essentially a victim of its own success, gobbling up enough market share to make it the prime target of competition. And I’m guessing plenty of the massive brands’ detractors wouldn’t lament its downfall. But Lidl, much like Aldi, isn’t exactly a supermarket savior. Instead, both brands aim to beat Walmart at its own game: low prices. “We feel we'll be able to plug some key gaps that exist,” William Harwood, a spokesman for Lidl US, told the WSJ. Specifically, Lidl wants to focus on inexpensive, high-quality groceries.

Unlike Aldi, who has been in the US market since the ‘70s, Lidl is looking to plug that gap far more rapidly. The chain plans to launch in the US in the next few weeks and open 20 stores in Virginia, North Carolina and South Carolina by this summer. Though the brand hasn’t specifically laid out its US expansion intensions yet, Hardwood did say the brand is hoping to open up 80 more stores on the East Coast by the same time next year. Real estate analysts believe another 150 to 200 stores are in the pipeline.

Walmart brass looking for reasons to worry don’t have to look any further than the United Kingdom. The WSJ reports that Walmart-owned supermarket Asda has seen sales stall for over four years, losing market share along the way; meanwhile, Lidl and Aldi have seen their share of the grocery pie steadily increase. Still, for the US market, Walmart CEO Doug McMillon doesn’t seem too worried. “We still have some more to address,” he said. “But we are on a path to doing so.” Sounds like the Rollback Smiley may have to put in some overtime shifts.