With Lidl’s expansion, local grocery store wars getting hotter

German grocery chain Lidl is making its way to Ohio — upping the competition for grocery retailers that are already feeling the impacts of the changing industry and consumer habits.

Lidl’s expansion is yet another heating up the competition after online retailer Amazon bought Whole Foods earlier this year. Major grocers — including Kroger, Meijer, Whole Foods, Aldi, Fresh Thyme Farmers Market and Costco — have all added stores to Southwest Ohio within the past several years, and are battling to get customers through the doors.

“It’s great news any time the consumer has more choices,” said Sandra Pereira, Beavercreek associate city planner.

The supermarkets and grocery industry have a major impact on local economies, and brought in $612 billion in revenue nationwide last year. More than 2.6 million people were employed by the industry in 2016 as well.

Beavercreek planning officials confirmed with this news organization that Lidl has submitted a land development application to build a grocery store on a lot on the southwest corner of North Fairfield Road and Lakeview Drive. More than four acres of land will be developed — nearby the ALDI store that opened just a year ago.

It’s not the only site that Lidl is looking at in Ohio. A spokesman told this newspaper in July that the grocery chain is “actively looking at sites across the state.”

The company posted two job openings in Columbus earlier last month — hiring for a regional real estate development manager and a regional real estate acquisitions manager. Both jobs would be based out of Columbus and would require travel, according to the job postings. Lidl is looking for possible new store sites in Texas, Ohio, Virginia, Georgia, South Carolina, North Carolina, Pennsylvania, Maryland, New Jersey and Delaware, according to its website.

The chain, known for its discounted prices on food products similar to Aldi’s, is focused on its first round of 10 stores that just opened in North Carolina, South Carolina and Virginia. Lidl is also known for its private labels and innovative store layouts — and it even sells “fashionable but casual” clothing.

“When you shop at Lidl, you experience less complexity, lower prices, better choice and greater confidence. For us, that’s grocery rethought,” said Brendan Proctor, president of Lidl U.S., in a magazine given to shoppers at store openings.

The popular discount grocery chain is rapidly opening stores, with its U.S. headquarters situated in Arlington, Va. Lidl plans to create more than 5,000 jobs in the U.S. in the next year, and will open up to 100 stores on the East Coast by summer 2018.

But U.S. sales have been weak so far for the German chain. In June, Lidl was drawing 11 percent of consumer visits to traditional grocers in nine markets in Virginia, North Carolina and South Carolina, according to data that inMarket shared with The Wall Street Journal. By August, Lidl’s share of that traffic fell below 8 percent, according to The Wall Street Journal.

“This is designed for us to learn and adapt and be nimble,” Will Harwood, a Lidl spokesman based at the company’s U.S. headquarters in Arlington, Va., told The Wall Street Journal. “It’s not about whether our model works in a market, but what we do to adapt to that market.”

Economic impact

Beyond more shopping options and lower prices, the deluge of new grocery store options in the area is adding more jobs and economic benefits for the region.

In just the past year, service options like Amazon Fresh, Shipt, Instacart and Kroger Clicklist have launched in most zip codes in the Dayton, Cincinnati and Springfield regions — with companies hiring for delivery drivers and adding distribution centers in the region.

With Amazon.com’s $13.7 billion purchase of Austin-based Whole Foods Market, even more change is expected for consumers who value quickness and convenience above all else. Whole Foods has one location in Centerville located at 1050 Miamisburg-Centerville Road, and another store in Mason at 5805 Deerfield Blvd. Whole Foods also has several locations in Columbus, and surrounding suburban areas.

“I think Amazon is providing us with some stiff competition in this area, and other traditional online shopping,” said Kristin Mullins, president and CEO of the Ohio Grocers Association. “The grocers are really trying to move to more convenient ways to shop. They are trying to think about how consumers want to get their groceries these days, and what’s the best and most effective way for them to get it to them.”

Karen Jones of Beavecreek said she plans on trying Lidl when it opens, but said she has no loyalty to one chain.

“I’ll go wherever the cheapest prices are. I’m not too picky,” Jone said.

Kroger changes

Kroger is the largest chain in the nation and has the largest impact in Southwest Ohio of all grocery stores. The increased competition has forced the giant chain, which employs more than 8,100 associates in the Miami Valley, to make changes to its strategy.

Kroger is planning to revamp at least 20 to 30 percent of its 2,793 stores, the Cincinnati-based company recently announced.

The grocery store chain recently announced its “Restock Kroger” campaign, which will seek to change the customer experience at 558 to 838 stores, according to the company.

Kroger will spend $9 billion in capital investments on the Restock Kroger plan over the next three years, according to the company. The campaign is expected to boost Kroger’s operating margin by $400 million by 2020, according to a press release from Kroger.

As part of the plan, Kroger will redesign stores to maximize self check while also expanding “Scan, Bag, Go” to 400 stores in 2018. Scan, Bag, Go allows shoppers to check out using wireless hand-held scanners in aisles as they shop.

The grocery stores will also undergo a space optimization process that will include reorganizations of some layouts and shelves at certain locations, according to Kroger.

Last year, Kroger expanded its online ordering grocery ordering service, called ClickList, to select locations in the Miami Valley and now most stores have the service.

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BY THE NUMBERS

100: new Lidl stores will open on the East Coast by 2018

5,000: new U.S. jobs to created in the next year by Lidl

$13.7 billion: spent by Amazon to acquire Whole Foods Market chain

$612 billion: in revenue brought in by grocers last year

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