How Lidl positions itself against Walmart, Aldi, Trader Joe’s as it grows in US

“Any time you’re talking about the competitive landscape, obviously you’re talking about Walmart,” Rampoldt said in an interview. “We have the most overlap with them, because they’re in all of our trade areas. They are everywhere.”

The company first opened U.S. stores in 2017, but the expansion has had some fits and starts. The U.S. division has had five different CEOs, according to Grocery Dive. Rampoldt joined in August 2023 after working as a consultant. In March 2024, Lidl U.S. named four new executives and cut an undisclosed number of jobs, a year after letting go of 200 workers in the states.

Last October, Lidl reintroduced its brand with a new campaign labeling it as “the super-est market,” centered on its curated assortment of private-label products, global imports and name brands with new branding components and updates to its experience online and in stores.

Lidl has about 190 stores in the U.S. and has plans to continue opening stores over the next 10 years. It will open four in October. This comes as Aldi, another European retailer much more established in the states, plans to add 800 stores over the next few years.

“We’re growing at what I would consider to be a modest pace for now, because we want to make sure the business is stable and operating exactly the way we want it,” Rampoldt said in a presentation at Groceryshop. “We want to make sure we have our operations and our commercial offering really locked down before we turn up the heat on growth, but we’re growing and we’ll continue to do so.”

Knowing who you are as a grocer

Rampoldt said Lidl has 1% market share in its trade areas, requiring the company to keep a close eye on competitors like Walmart and Costco while being careful about how it prices against them, looking at their assortment and product quality, as well.

“We know who we are, and we want to be who we are and not let ourselves be nudged into adding products that we really don’t need because we see someone else carries it,” Rampoldt told Modern Retail. “If competitors are moving up on price, we want to be very careful about that, because we want to be the lowest price in the market. We want to maintain downward pressure on price.”

He also named Aldi and Trader Joe’s as competitors, with stores that look similar in being private-brand-focused businesses, making it key for Lidl to differentiate itself. Aldi and Lidl share similarities in being discount-focused retailers with a heavy focus on private brands, Rampoldt said, adding that Lidl and Trader Joe’s share an emphasis on specialty products.

“When you think about the kinds of things you might bring to a party — imported cheese, imported olives, charcuterie, imported pastries, cookies or chocolates — that’s where we have a lot of overlap with Trader Joe’s,” Rampoldt said.

Rampoldt said the biggest difference between Lidl and Aldi or Trader Joe’s is that Lidl stores have in-store bakeries and more of an emphasis on fresh produce. Under the new brand refresh, Lidl reduced the price of its fresh-baked croissant, one of its top sellers, to make it more of an “extraordinary” value.

At the conference, Sprouts Farmers Market CEO Jack Sinclair spoke on stage after Rampoldt. Rampoldt complimented Sprouts on also “knowing who they are and not trying to be anything else,” going after one specific chunk of the U.S. grocery market without getting distracted. Sinclair had said Sprouts is focusing on the $250 billion of the roughly $1.6 trillion U.S. grocery market that comes from health-focused shoppers.

“[Sinclair] could pick up so many sales by putting things into his store that customers would buy, but that would cause them to start to drift from who they are,” Rampoldt said. “I really admire their discipline.”

Lidl, on the other hand, is more focused on the middle-income discount shopper rather than the health-conscious crowd, which plays into its assortment. Instead of adding more products, Lidl has cut more than a quarter of its assortment since Rampoldt walked in the door. Rampoldt said the company went from 4,500 SKUs at that time to 3,250 now, excluding seasonal products.

“Because we are a discount retailer, we rely on operational efficiencies; our boxes are smaller, they’re less expensive to build, less expensive to run. We can’t overdo it on assortment,” Rampoldt said in the presentation. “There’s a lot of work to make sure we’ve got the right items in every category. … We can meet all of our customers’ needs with that small number of SKUs if we’re really smart about it.”

‘The consumer is really aware’

In competing with other grocers, Rampoldt said Lidl has to get customers to try its products to convince them that they are not only worthy alternatives but are also significantly less expensive. He used its ice cream brand Bon Gelati as an example, saying it stacks up well against Unilever’s Magnum.

“In ice cream, when you’re talking about quality, you’re talking about percentage of fat in the ice cream — the fattier it is, the better it tastes — the thickness of the coating, the chocolate around the ice cream,” Rampoldt said.

“What we’ve done is we’ve listed their product, and we have it side by side with our product on the shelf — basically saying, not in these words, but, ‘Magnum is a great product, and we have it at a great price; we also have our product, which is phenomenal, and you should consider it equivalent at roughly half the cost.'”

Like what other grocery and retail executives have said repeatedly this year, Rampoldt said customers continue to get more focused on value as e-commerce has made it easier for them to compare prices.

“They’re making multiple trips to get the best price on each part of their basket, going to multiple stores at different times of different times of the week,” he said. “You really have to be very sharp on price, because the consumer is really aware of what costs are here and there, who’s got the best deals, and who has the best everyday prices.”