German discount grocer Lidl will take over Best Market’s 27 stores in New York and New Jersey, including 24 on Long Island, deepening its push into the U.S. market.
With its entrance on Long Island, Lidl is continuing its expansion into the metropolitan area, the company announced Friday.
Bethpage-based Best Market is a family-owned business that opened its first store in 1994.
“Partnering with Lidl on this deal offers our employees a secure future with a growing grocer and continues the great tradition we started more than 20 years ago. We are delighted to be part of such a win-win, and Best Market customers have something great to look forward to with Lidl,” Aviv Raitses, co-owner of Best Market, said in a statement.
Best Market employs about 2,700 workers in New York and New Jersey. Workers will be guaranteed employment at Lidl stores at the same or better salaries and benefits, said Will Harwood, spokesman for Lidl US, which is based in Arlington, Virginia.
The Best Market stores will be remodeled and converted to Lidl stores starting next year, he said.
“We’re very excited to introduce customers on Long Island and in the New York City area to the Lidl shopping experience,” Harwood said.
Best Market’s 24 stores on Long Island include locations in Commack, Merrick and New Hyde Park.
The chain recently has been undergoing its own expansion, having taken over a former King Kullen store in Syosset in April. It was planning to open a store in Center Moriches, in a former Waldbaum’s, this past summer, but has not.
Lidl’s Best Market acquisition is expected to be finalized in a few weeks, Harwood said. The financial terms were not disclosed.
The Best Market stores not on Long Island are in Harlem, Manhattan; Astoria, Queens; Holmdel, New Jersey; and a 28th location, in Newington, Connecticut. The Connecticut store is not part of the Lidl deal; Best Market has not responded to inquiries about the future of that store.
Lidl will also take over the Best Market warehouse in Bay Shore.
Lidl is a limited-assortment chain like Aldi. Such stores offer fewer than 2,000 “center-store” (packaged) goods and perishable items. Other examples include Trader Joe’s and Save-A-Lot.
Lidl, which has 10,500 stores in 29 countries, is known for brightly colored stores and offers proprietary brands, and fresh produce, meat and bakery departments.
The chain opened its first U.S. stores in the summer of 2017 and now has 59 stores from Augusta, Georgia, to Union, New Jersey.
Lidl entered the metropolitan area with the Union store this week, and it plans to open a location on Staten Island.
When the chain entered the U.S. market, it announced expansion plans for 100 stores by summer 2018.
But its expansion plans slowed.
“My impression is that they didn’t hit their initial sales targets and so they are retrenching. My observation is that their initial stores were impressive but quite large for a limited-assortment store,” said Jon Hauptman, senior director at Inmar Analytics, a Long Grove, Illinois-based grocery industry research firm.
Limited-assortment stores are about 15,000 square feet in size, while traditional supermarkets typically range from 35,000 square feet to 60,000 square feet.
Asked whether the sizes of the Best Market stores would change, Harwood said Lidl is “continuing to adapt and optimize our stores to best serve each new community.”
Limited-assortment and dollar stores are showing the fastest growth among grocery store formats, Hauptman said. Limited-assortment stores’ sales increased 6.7 percent between 2016 and 2017, while dollar stores’ sales grew 6.6 percent. Traditional supermarkets’ growth was flat.
“During the downturn in the economy [from 2007 to 2009], shoppers . . . started shopping differently,” and began trying new places to buy food, Hauptman said. “And now that the economy is better they’re not necessarily swinging back to their old ways.”
Lidl is a low-price leader globally, and its entry here will “start a price war on Long Island not seen in the last 35 to 40 years,” said Burt Flickinger III, who founded Manhattan-based Strategic Resource Group and has studied Long Island retail.
Lidl will be a “competitive nightmare” for local food retailers, especially ShopRite, the current low-price leader among Long Island grocery stores that sell regional, national and private label brands, he said.
ShopRite is a brand owned by Wakefern Food Corp., a retailer-owned cooperative based in Keasbey, New Jersey, with more than 270 ShopRite stores in six states.
“It is undoubtedly a fast-changing industry with a very competitive landscape, but we’ve always listened to our customers who live and shop in the areas we serve, and that has helped us to continually innovate and adapt to meet their needs,” a Wakefern representative said.
Long Island’s grocery store leader is Stop & Shop, a regional chain based in Quincy, Massachusetts, with 51 stores and a 35.25 percent market share here, as of a June report by Food Trade News, a Columbia, Maryland-based publication. Best Market ranked sixth, with 5.31 percent of the market.