May 7, 2015

Lidl changes US management

"Better late than never" (photo: Creative Soul - Fotolia)
Has Lidl furled or unfurled its sails for America?
In a surprising move, German discount giant Lidl has changed its US leadership within only leagues of colonising America. The top brass of Lidl International have just announced to staff in Virginia that senior execs Kenneth McGrath (39) and Kevin Proctor (42) are leaving the US subsidiary.

The executive duo is succeeded by Ireland CEO Brendan Proctor (40). He will be assisted by Gareth Reed (33), a new member of the management board and previously responsible for expansion.

Admittedly, American business culture is more hire & fire than here in "Old Europe", but one can only speculate why Lidl boss Sven Seidel and board member Patrick Kaudewitz made their decision. Has progress been too slow on preparing US entry? Or were there other reasons? Above all, will it delay entry to the States?

Lidl states that both managers are leaving at their own request and thanks them for their achievements. The discounter also insists that none of the changes will affect the official start date in 2018, which our newspaper believes was recently brought forward to 2017. It is understood that the secretive private company wants to have secured at least 100 sites before the official launch.

Westward Ho!

At least the outward signs would seem to confirm this. Recently US partner MGP Retail Consulting LLC paid $57m to build a local HQ in Arlington, near Washington. And, at the beginning of this week, authorities in Alamance County/North Carolina gave the go-ahead for the construction of a 35-hectare distribution centre.

Receiving $5.4m in local financial support, Lidl is investing around $125m of its own in the 80,000m² DC. According to our information, about 170 staff have already been recruited and are being trained successively at German high command in Neckarsulm. 

Despite these obvious signs of forward momentum, no one could accuse Lidl of rushing in where angels fear to tread. Plans to expand in the US go back as far as the turn of the century. The American dream, however, belongs to the brave. Had Christopher Columbus not crossed the pond or the Pilgrim Fathers turned back within sight of Plymouth Colony, the Native Americans would still be living undisturbed and in harmony with the environment.

It is certainly unusual that the methodical Schwarz Group subsidiary, with its vast international experience, has parted from its top US crew in mid-Atlantic. After all, local consumers are generally profiting from a broad economic recovery; America is hardly a high-risk, emerging country; and arch-rival Aldi continues to thrive there.

Lidl store (photo: LZ-Archiv)
A Lidl store in Germany
Even on this little blog, any news of impending entry is hailed by a huge fanfare from American well-wishers. The advanced greeting committee goes far beyond families of the military once stationed in Germany, ex pats, and those US citizens with German descendants. Anyone who appreciates German food or who simply likes the culture is also rooting for the discounter to come.

Whatever may be the cause for the recent changes, one could almost wonder whether the recent strength of the dollar has given the thrifty Swabians second thoughts? Or could the recent plundering and burning of stores in Ferguson/Missouri and Baltimore etc. have offended their innate love of order?

Doubtless Lidl will open shop in its own good time. But, if only for the sake of its many US fans, it is worth speculating how this German retail success story could be enticed to come to America ASAP. A welcome email from Hillary Clinton's private online account? A Republican win in the presidential election and an invitation to tea in the White House Rose Garden? Free tickets to the Super Bowl? Or carte blanche from the United Food & Commercial Workers Union?


Related article in German: By Jan Mende, Christiane Ronke, Bernd Biehl & Tanja Fries in Lebensmittel Zeitung, no. 19, 08.05.2015


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3 Comments (Write a comment)

  1. Created 18 May, 2015 04:48 | Permanent link

    Reason?

    This is a serious move that will have heads thinking about the reason and purpose behind such a change in leadership. One can only speculate what moves Lidl is going to make so that it can hasten its entry to the US market, and will such move give Lidl an upper hand among others who wish to do business in America.

  2. Cesc
    Created 23 July, 2015 12:33 | Permanent link

    Big Greeting Committee

    The advanced greeting committee goes far beyond families of the military once stationed in Germany, ex pats, and those US citizens with German descendants.

  3. fire
    Created 4 March, 2016 16:00 | Permanent link

    Favoritism at Lidl

    I really do not get why Lidl have to send executives from Ireland who have simply no idea about the US economy and culture. Lidl's area managers and regional managers do not run the business, it is the low level staff members, dutys, deputy managers who run the business. I always wonder why there is pick-and-choose favoritism at Lidl?

    Especially all the managers from Ireland and UK are used to a referral culture and do not appreciate educated or highly experienced people, they prefer to create lobbies in retail.

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