More LIDL could mean lower grocery prices across Raleigh

German grocery discounter LIDL's recent purchase of a plot of land in Raleigh could be good news for all shoppers, even if they never visit the store.

Posted 10:08 p.m. Apr 5, 2018 — Updated 7:22 p.m. Jul 13, 2018

Mandy Mitchell

, WRAL specialty reporter

RALEIGH, N.C. — German grocery discounter LIDL's recent purchase of a plot of land in Raleigh could be good news for all shoppers, even if they never visit the store.

Research at the University of North Carolina at Chapel Hill shows lower prices across the board in markets where LIDL first got a foothold in the United States

"They have done pretty disruptive things in many markets which they have entered," said Katrijn Gielens, study author and an associate professor of marketing at UNC. LIDL commissioned the study.

"In most markets we studied, there was a reaction, and many of the retailers, to some extent, lowered their prices," she said.

The study, which looked at 48 grocery items, including dairy, meats, produce and canned and frozen foods, found that competing retailers set the price for a half gallon of milk about 55 percent lower in LIDL markets compared to LIDL-free areas.

LIDL is able to keep prices low by cutting out the middle man. "They have their own product," said Gielens. "It's a private label, directly from the supplier."

The study found:

Aldi sets its prices up to 19 percent lower in markets where LIDL operates compared to where it is not present
Food Lion and Kroger set their prices up to 15 percent and up to 13 percent lower, respectively, compared to where there is no LIDL
Walmart and Publix set their prices up to 4 percent lower when LIDL enters the market

Gielens compared the LIDL business model to other direct-to-consumer options that have been working well since the recession, as shoppers of all income levels become more price-conscious. She pointed to the success of Warby Parker, which sells eyeglasses, and Dollar Shave Club, which sells low-cost razors.

"It's something that is resonating with so many different consumers across the board. It has nothing to do with income levels. It's about being smart," she said.

LIDL has 14 North Carolina locations, and the purchase of 6 acres of land at the corner of Buffaloe and New Hope roads could be the site of the next store. A company spokseman was not ready to be specific about that site Thursday.

Will Harwood, director of communications for LIDL, said, "Our teams are looking at sites for future growth in the area, but it is early in that process, and we are not addressing each individual one at this stage."