German retailer Lidl on Friday formally announced it has established a U.S. headquarters and distribution facility, pledging to create "a unique experience for American consumers that will be unlike anything else in the market."
The announcement comes almost exactly two years after reports first surfaced of Lidl's plans to expand in the U.S. The release also confirmed that former Lidl Ireland president Brendan Proctor will lead the effort as president and CEO of Lidl US.
Lidl, based in Neckarsulm, Germany, is one of Europe's leading retailers, operating nearly 10,000 stores in 26 countries. Sources told SN it was seeking to expand in the U.S. because it was nearing saturation in many European markets. Privately held by the family-owned Schwarz Group, Lidl (along with German based sister banner Kaufland) generated around $98.3 billion (U.S.) in annual sales in 2014.
On Friday, Lidl confirmed it was establishing its U.S. corporate headquarters in Arlington, Va., and also, a regional office and distribution center in Spotsylvania County, Va. The expansion represents a $202 million investment, including $77 million for its headquarters and $125 million in Spotsylvania, according to an announcement from Virginia Gov. Terry McAuliffe. Lidl will employ 500 in Arlington and 200 in Spotsylvania.
Lidl US said the move is part of "early preparations to launch its expansion into the U.S. market," but did not confirm a date for store openings or the number of stores it intends to build. Schwarz Group's chairman said previously that stores would open no later than 2018. Sources told SN Lidl would look to build around 100 stores initially.
In Europe, Lidl runs stores that are similar to German rival Aldi, featuring private brands, limited service departments and everyday low prices. Sources told SN that Lidl was looking at U.S. sites that are larger than Aldi's 10,000-square-foot footprint, but a spokesman would not confirm that Friday, saying the store prototype was still in development.
"We are excited to take this important step to launch Lidl's expansion into the United States and look forward to introducing American consumers to a different type of shopping experience," Proctor said in a statement. "Our philosophy is simple: we are focused on offering customers top quality products at the most competitive pricing in convenient locations. We plan to build on the foundation that has made Lidl so successful in Europe, while creating a unique experience for American consumers that will be unlike anything else in the market."
Proctor made the announcement Friday alongside Gov. McAuliffe in Germany. The Virginia Economic Development Partnership worked with Arlington County and Spotsylvania County to secure the project. McAuliffe approved a total of $5 million in grants from the Governor’s Opportunity Fund as well as $2 million in funds from the Virginia Economic Development Incentive Grant. Additional funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program, the state said.
"We want to thank Governor Terry McAuliffe, as well as the teams in Arlington and Spotsylvania, who recognized Lidl's potential and worked with us to bring Lidl to the area. We are honored to work with this incredible team of professionals who have laid the groundwork for Lidl's success in the United States," Proctor said.
Said McAuliffe: "I was thrilled to meet with Lidl’s company leaders in Germany today to close this tremendous deal. This is a significant win for Arlington County and Spotsylvania County, and the jobs and economic activity it will generate will contribute directly to my administration’s work building a new Virginia economy. Lidl’s investment demonstrates Virginia’s ability to attract companies from all over the globe.”
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