Discount Grocer Lidl To Spend $500M To Ramp Up U.S. Expansion

German discount grocery chain Lidl is planning to expand aggressively in the United States over the next year and a half, spending more than $500M to open 50 new stores by the end of 2021.

The new stores will be mainly on the Eastern Seaboard, with locations planned for Delaware, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia, the company says. New Jersey and Maryland will receive 10 stores each.

The grocer will also open another distribution center, which will be in Covington, Georgia, to support its growth. There are currently three operational Lidl distribution centers.

Lidl, which has a similar deep-discount model as rival Aldi (also a German company), has about 11,000 stores worldwide. It has had a U.S. presence since 2015, when it opened a headquarters operation in this country in Arlington, Virginia, followed by its first stores in 2017.

Now the company has 95 U.S. stores, including 27 it acquired in 2018 when it bought the metro New York grocer Best Market.

The grocery chain has continued to roll out new stores this year. The most recent one was in late August in Dunwoody, Georgia. In early September, it will open a location in Alexandria, Virginia.

As a real estate venture, Lidl takes a number of forms. Its main 15K SF prototype store, including surrounding parking lot, takes up about 2.5 acres, according to the company. In Europe, the retailer has located stores in adapted train stations, historic structures and stadiums, and says it is open to similar projects in the United States.

Aldi, which has a much larger presence in the U.S., has been opening stores at a considerable clip as well. In June, the company opened its 2,000th U.S. store (a location in California), and by the end of 2020, will have opened about 100 new locations for the year, Supermarket News reports.

Aldi also opened a new distribution center recently, in Loxley, Alabama. The company's long-term goal (by the end of 2022) is to have 2,500 U.S. stores.

Among retail categories, grocery stores have been doing well during the pandemic, as options for away-from-home eating have been limited. In July 2020, grocery store sales were up 10.6% compared with the same month in 2019, according to the Census Bureau.