The German discount grocer Lidl made its United States debut this June, opening 20 stores in the Carolinas and Virginia just weeks after its compatriot Aldi announced its own expansion plans in the U.S. earlier this year.
The timing could not be worse for established chains like Walmart and Kroger, which have simultaneously been digesting the news of Amazon's Whole Foods takeover. Unfortunately for Walmart, it's a move that indicates the e-commerce giant is turning its attention, and tolerance of razor-thin margins, to the lucrative grocery segment.
Battle lines: Lidl entered the market aggressively, with prices in its Winston Salem, NC, store that were 9.1% lower than the local Walmart, according to a study conducted in June by Jefferies analyst Christopher Mandeville. Given those results and Lidl's "enjoyable" shopping experience, he says Lidl could be "highly disruptive" to incumbents like Walmart.