Will Lidl shake up the US grocery store wine business when it opens its first stores on the East Coast next month?
That certainly seems possible after the company’s May announcement that its US stores would offer a large selection of private label and control label wine at what Lidl officials called “market-beating” prices – as much as one-half less than those carried by most mainstream supermarkets. Among the labels touted at the news conference: A private label Chilean Malbec for $7.00.
In this, the wine selection will be more reminiscent of what Lidl does in its European stores than what arch-rival Aldi has done in the US, where it has stuck with less expensive, but still mostly domestic brands like Winking Owl. In the UK, where wine plays a key role in product assortment, Nielsen says Aldi and Lidl controlled 13.3% of the market in the first quarter of 2017.
Lidl officials said at the news conference that the wines would be part of its Preferred Selection brand, which will include cheeses and international specialty items.
Said Lidl spokesman Will Harwood: “Wine will be a very important category for us, and we're very excited about what it can do for us.”
Jim Hertel, senior vice president, analytics of Willard Bishop, an Inmar analytics company in suburban Chicago, said Lidl may be trying to do for its price range what Costco has done with its Kirkland private label range, which includes everything from a $6.00 Italian Pinot Grigio to a $40.00 Champagne. The warehouse chain has become the market leader, with sales up 46% over the past five years while offering quality wine at fair prices that others, including Target and Walmart, have failed to duplicate.
Whether Lidl can be successful, though, is another question.
“What Costco did with Kirkland was establish its wine credentials before it launched Kirkland,” says Hertel. “You learned you could buy a quality $10.00 bottle of wine at Costco, so you didn’t have any doubts about buying Kirkland wine. That’s where Lidl is going to face a bigger challenge. Is it going to get credit for its wine before it establishes a reputation?”