Discount grocer Lidl still sees opportunity around Philly and South Jersey, just less than before

These days, grocery stores are trying to lure customers and compete with mega-merchants like Walmart through the convenience of online shopping, offering organic foods, or selling their own branded merchandise at lower prices.

Still, executives for the German-based supermarket chain Lidl, believe there is room for more in the Philadelphia region and across the country — but perhaps not at the level they originally planned.

So what is going on in Cherry Hill, Cinnaminson, Burlington, and other South Jersey locations where Lidl planned modern stores that offered, among other things, local organic foods at discount prices? A reader posed that question on Curious Philly, a forum in which Inquirer reporters find answers about issues of interest in the region.

This was not an easy one because mum is the word — schweigen, the Germans might say — on new stores where construction remains in the wings. No worries. While company officials won't talk, municipal planners are in the know and were very helpful.

>> CURIOUS PHILLY: Where we help you find answers

Lidl is planning to build a Cherry Hill store AT Route 38 and Cuthbert Boulevard, near the Walmart shopping center.

Here's the quick answer. Thumbs up for Cherry Hill in Camden County, Cinnaminson in Burlington County, and Millville in Cumberland County. It's not looking so good for Burlington Township and Delran, sources say. In Mantua, Gloucester County, plans were approved last year, but the company has not submitted construction applications.

Last year, Lidl executives announced they would open 100 new stores across the country — by now. Instead there are 53 stores in six states, first emerging in the South. The company had a tough American launch as it failed to live up to the hype, says Richard R. George, a food marketing professor at St. Joseph's University. If Lidl wants success, the company must up its game, he said: "I don't think they understood the American consumer."

That's true, said Bill Bishop, co-founder of food-retailing consultancy Brick Meets Click, based in Barrington, Ill. However, Bishop said, Lidl is slowly winning customer trust with inexpensive store brands that fit a desired niche. As the company figures out the American market, "they are doubling down," Bishop said.

"They are absolutely correct in there's a huge market for them in the U.S.," Bishop said.

The company opened a store in Delaware last year, and picked locations in Philadelphia and the surrounding suburbs.

Cherry Hill, with the busy commercial corridors on Routes 70 and 38 and Haddonfield Road, has given approval for Lidl to build on Route 38. Lidl has yet to apply for construction permits.

Cherry Hill Mayor Chuck Cahn said he thinks Lidl will be a great addition to the township's "thriving grocery store market." He noted that successful retail stores "need to choose a strategic location."

Lidl will have to compete with Walmart, which has been expanding with discounted bulk foods, and ShopRite, which offers online shopping and parking where customers can do a quick pickup. Lidl's Cherry Hill plans rankled ShopRite execs. ShopRite sued Lidl, complaining that the German grocer did not adequately address traffic concerns and runoff drainage. ShopRite lost that battle.

Cahn thinks there is enough room for Lidl in Cherry Hill even as shoppers flock to the popular Wegmans at Route 70 and Haddonfield Road, saying, "As we've seen over the past several years, businesses of all sizes continue to choose to locate and invest in Cherry Hill, bringing a diversity of retail options and services to our residents."

Lidl's major competitors, Aldi and Whole Foods Market, which is teaming up with owner Amazon to provide home delivery for fresh foods, are also in Cherry Hill, said George. The same is true of Vineland, where a cluster of stores includes Walmart, ShopRite, and Aldi, he said. Curious shoppers arrived for Vineland's opening, but the return rate was so low, he said, that "you could throw a bowling ball down the aisle because no one was there."

Lidl spokesman William Harwood declined to answer questions about future plans, but he emailed a statement about the store in Vineland.

"We are proud to serve customers at our Vineland store every day with high quality products and low prices," Harwood wrote. "We are also expanding and hiring in the state, in addition to looking at possibilities for future stores. It's too early at this stage to address each individual site."

Harwood pointed to an independent report that among other things says Lidl is "stealing customers from a wide range of incumbent grocers."

Millville planner Samantha Silvers said the Planning Board approved Lidl's site at Second Street and Union Crossing Boulevard in May 2016. The store will compete with a ShopRite across the street and a nearby Walmart that received approval to expand in 2010. Silvers said Lidl is targeting a different market with organic options at affordable prices. Part of the company's business model includes selling local produce. Silvers said it would be an economic boost for Cumberland County farmers who grow the popular Jersey tomatoes, squash, and lettuce.

In Burlington County, it appears the company has backed off expansion into Delran and Burlington Township. Burlington approved plans and offered tax incentives, but township officials have not heard from Lidl for months, Mayor Brian Carlin said. "We were excited to have them come into the township," he said, adding that he hopes plans are merely delayed, not scrapped.

Cinnaminson Mayor Donald Brauckmann said the township has been working with Lidl for nearly four years to develop the former Garden State Motel, now demolished. "The area being redeveloped totals nearly nine acres and will preserve the existing Friendly's restaurant, but offer new retail options," he said.

Residents want another option for grocery shopping, officials say. Committeeman Ryan Horner, who is responsible for the town's economic progress, said, "The Lidl development is in the heart of our redevelopment."