Germany’s Lidl to price groceries up to 50% below its US rivals

NEW YORK (Reuters) – German discount grocery chain Lidl, which is opening its first US stores this summer, said its products will be up to 50% cheaper than competitors, which are already caught up in a price war.

“This is the right time for us to enter the United States,” Lidl US chief executive officer Brendan Proctor told Reuters at a media event in New York late on Tuesday. “We are confident in our model. We adapt quickly, so it’s not about whether a market works for us but really about what we will do to make it work.”

Lidl, which runs 10,000 stores in 27 countries, and German rival Aldi Inc. have already upended Britain’s grocery retail market, hurting incumbents such as Tesco Plc and Wal-Mart Stores Inc.’s ASDA supermarket chain.

Lidl said it would open its first 20 US stores in North Carolina, South Carolina and Virginia starting on June 15. Eighty more will follow in the United States within the first year, which Procter said would create 5,000 jobs.

Analysts estimate the company will have more than 330 US stores by 2020.

The stores will be 20,000 square feet in size and have only six aisles. The retailer’s in-house brands will account for 90% of the products.

The first 100 stores are newly constructed stand-alone retail properties that Lidl owns and developed. The company is open to leasing locations as it opens new stores, Proctor said.

As Reuters first reported, WalMart is running price tests in 11 US states, pushing vendors to undercut rivals by 15%, and Aldi is aiming for prices 21% below its US competition.